The Waterbury Democrat., 1944-12-28


 tion of the revised federal income effective Jan. under the 1944 tax
 PURPOSE OF RETURN-Undel the pay-as-you-go system of in. come tax collections, most individ. ualS pay all or a substantial par of their income tax during the year in which they receive their income The tax is withheld from theil wages or paid in quarterly install ments as estimated tax, or both However, these payments do no exactly equal the actual tax liabil. ity. It is necessary for each taxpay. CT to file a return at the end of thu year showing his actual ta liabil ity. so that any additional amour due may be collected or any ovel payment may be refunded.
 WHO MUST FILE Everyone (including minors) whose 1914 in come was $500 or more. Other whose income was less than S5Ol but had tax withheld from thei wages should file to get a refund
 WHEN TO FILE - Not late, than March 15, 1945 File early Service men and women stationed outside of the United States may postpone filing.
 WHERE ITO FTIE-With thu Collector of Internal Revenue ir your district.
 FORM OF RETURN-There art two income tax return forms. Ont form is on the Withholding Re. ceipts, Form W-2 Rev.), furnished by employers to employees in dup licate. The other form is tho standard return form, called Form 1040. However, Form 1040 may bt used either as short" or long form return. Therefore, there art three ways of making a return a, follows:
 l. Withholding Receipt. = Alp. proximately 30,000000 persons art expected to use the new system o1 making return by stating theil income and exemptions on theil Withholding Receipts, and per. mitting the Collector to compute the tax. The Collector will givt them credit for tax already paic and send either a bill or refund check for any difference. If hus. band and wife nake a combined return on a Withholding Receipt the Collector will figure their ta1 on either their combined or sepa. rate incomes. whichever is to tht taxpayers advantage. Generally speaking. use of Withholding Receipt as return is limited tC persoEs whose income was les. thar S5,000 and virtually all iron wages subject to withholding.
 3. Short-Form Return.-An esti mated 10,000,00O persons are ex. pected to make "short-form re turns" on Form 104O, which i. permitted in the case of anyone whose income was less than $5 ,O0O regardless of its source. On z Short-form return, no deductions are listed (other than business deductions) and no arithmetica computation of tax is necessary since the tax is found in a table which automatically allows about 10 per cent of the taxpayers tota, income for reductions" This is called a "short form" because hall of the form may be torn of, anc only the top sheet needs to be filed
 3. Long-Forum Return.-An esti. mated 10,00O,0OO persons are ex. pected to make '1ong-form" re. turns on Form 1040. This form o1 return is required in the case o1 any taxpayer whose 1914 income was 5000 or more or who (regard- less of the source or amount oi his income) claims deductions amounting to more than 10 per cent of his income.
 DEDUCTTONS-In 0the case oi return made on a Withholding Receipt or on a short-form Form 1040, the tax will be figured from table (provided by law) which automatically allows about 10 per cent of the taxpayers total income for charitable contributions, in- terest. taxes, medical expenses casualty losses and miscellaneous deductibel expenses. Use of those forms is entirely optional. however and anyone who claims larger de. auctions is entitled to itemize anc deduct the actual amount of his deductible expenses by making 8 long form return on Form 1040 Although required to make long form returns, persons with income of $5.000 or more are permitted by law to take a standard deduc- tion of $500 in lieu of itemizing deductions.
 INCOME TAX RATES ANp EXEMPTIONS - The income tax includes a normal tax" and a "surtax." Both are figured as per- centages of income but with diff ferent rates and exemptions. The normal tax is a flat rate of 3 per cent The surtax Is at graduated rates ranging from 20 to 9l per cent For normal tax, Q flat ex- emption of $500 is allowed for each taxpayer. Tn the case of a joint return of husband and wife, the combined normal tax exemption is ei,000 if each has income of $500 or more; but if the income of either was less than $500. the oom- blned normal tax exemption is $500 plus the actual amount of the smaller Income. For surtax. an ex- emption Of $500 Is allowed for thc taxpayer, $500 for his wife and nAl1 Inr anAh AnNnnNmak rslntloa.