The Wyandotte herald. (Wyandotte, Mich.) 1879-1943, 1943-01-08
Income Tax
Law Explained

Mote The following is the first
of u series of ten articles especially
prepared for use by weekly newspap-
ers, giving useful information concern
ing the income tax and the Obliga-
ton TO file returns. The series will
present authentic information and is
being published at the request Of the
commissioner Of the Treasury Depart
ment.)
The federal income tax is, as the
name implies tax levied upon in
comes, aud it is payable in relation
TO the amount of income. Income, for
Federal income tax purposes, means
in general any compensation for ones
services, whether the compensation be
in money or in goods or other SER
vices; it includes also the net value
received for the product of ones labor,
GUS farm produce in the case of far
mer; income from investments pro
lit from business operations; and 9th
ter gains from sales and exchanges of
goods and property. Certain limited
c;utegOrieS of income are, however, tax
exempt, and to the extent of such
exemption are excluded i'll computing
the tax
Because of exemptions from the tax
given 10 persons having less than GER
tain stated amounts OF income, as we'll
as because of various deductions and
credits allowable, only small pro
portion OF the number of persons re-
ceiving income have until recently
been subject To the tax. Thus, of the
estimated - million persons i'll this
country who received income i'll one
form Of another during the calendar
year 1871, only some 70 million per
sons were required To file Federal i'll
come tax returns for that year, while
of these same Z6 million, more than
. million were not taxable due to Gre
dts and deductions allowable.
As result of the lowering of ex-
tmPtiOns, many more persons are now
subject 10 the Federal income tax
than before, and for tie calendar year
1912 it is estimated that more than
81 million persons will file Federal
income tax returns. To the large num-
Der of persons now subject to the Fed
eral income tax, awhO have never re-
ported income before for Federal tax
purposes, an understanding of the
law and applicable regulations is of
prime Importance.
An income tax return is q declara-
ton on the part Of the taxpayer OF
his total taxable income for the year,
together with the various deductions,
exemptions, and credits to which he
is entitled. 1t is In reliance upon vol
| rnfa
Of taxpayers generally, that the cost
Of administrator Of the income tax
can be kept at minimum Though
the return Is voluntary statemeOt.
any psssea UhN iNahaaly makes q pe-'
tura which he does not ba3ieTs - ~,
true and correct IN ever material
matter Is subject to the penalties pro-
yided By law.
The first requirement OF the law Is
the filing Of an appropriate return.
For individuals generally, this must
be done by March 10 following the
end Of the calendar year. The return
must be filed with the appropriate
Collector of Internal Revenue for the
district in which is located the legal
residence or principal place of bush
ness Of the person making the return.
Under the-present law every single
person. and every married person not
living with husband or wife, having
total income {earnings, together
with other ineome) Of $500 or more,
and married persons living with hus-
band or wife throughout the taxable
year, who have an aggregate income
(tOtal earnings Of both husband and
wife. together with other incOme) Of
81 200 or more, regardles Of the
amount of net income, must file a re-
turn.