The Waterbury Democrat., 1944-04-07
Estimated Income Tax
Additional Instructions Supplied by Internal
Revenue Department for Persons Required
by Law to File Declarations of Esti-
mated Income for 1914.

Certain taxpayers are required by
law to make declaration of esti-
mated income and victory taxes for
1914. Persons who are not outside
of the continental United States on
April IS, 1914, must file their declar-
atoms on or before that date except
that certain farmers may elect to
wait until December Is, before they
file. The taxpayers who file are
those that are not kept up to date
on their income tax payments by
withholding from wages.
They owe additional tax either
(a) because their wages are not sub
ject to withholding or are high
enough so that they are subject to
tax rates that are higher than the
Withholding tax, or (b) because they
have other income-such as rents,
dividends, interest, or profits from
property or stock transactions -
from which no tax is withheld. After
the close Of the year, an annual in
come and victory tax return shows
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tons, tax liability, and payments for
the year.
The form on which the declara-
ton of estimated tax for 1914 is to be
made, Form 104o-ES, Is a short slip
3 "a K inches, and Is the only
form that needs to be filed by the
taxpayer. Copies Of the form have
been mailed to all persons who filed
declaration for 1913. together with
two alternative work sheets furn-
ished for their convenience. Other
persons may obtain forms from any
Collector of Internal Revenue upon
request. The taxpayer needs to use
only one Of these work sheets,
whichever may be the one best
suited to his circumstances, and
should retain 1t for his personal
record.
Filling out the work sheet Is
process similar to the making of
regular return, except that 1t deals
with estimates instead of actual
figures. There is first estimated the
total Of all income which may be
received in 1914, based on past ex-
perience in regard to salary, inter-
est. dividends, rentals, sales, etc,
and future probabilities.
The approximate amount of tax
due on that income is then de-
ter1nined. In a short-form work
sheet it is necessary only to enter
the amount Of estimated total in
come from all sources, including the
net profits from farming and other
business, deduct an allowance for
the personal exemption status, and
insert the appropriate amount OF
income tax as shown In the table
on the back of the form. This form
has no entries for deduction of eX-
penses. since the income taxes
normal tax and surtax) indicated
in the table were computed after
making allowance for average de-
auctions, such as interest, taxes and
contributions. approximating per
cent Of the net income after deduc-
ton for personal exemption. In
order to give effect to these deduc-
tons without actually showing
them in the form, the amounts used
for personal exemption and credit
for dependents are in creased, so
that they are larger than the fig
ureS used for the regular return,
but the Bureau Of Internal Reve-
nue. has approved their use for the
making of estimates. In deter
mining the victory tax, there is de-
Quoted from the total income a
specific exemption, and tax OF
per cent Of the balance Is COM
puted and entered In the proper
space. The total of the income
tax plus the victory tax Is then
entered in line on the face OF
the declaration.
An alternative form Of work
sheet Is intended for taxpayers
whose probable income is over
$4,000, and for those with smaller
incomes who expect to have unus-
ually large deductions or who
otherwise desire to make a more
detailed computation of their tax.
This work sheet permits an estimate
Of each separate item Of the income
and allowable deductions, with an
exact computation of the tax upon
the resulting estimated net income,
after allowance for personal exemp-
lions and credit for dependents. In
general, the items on this work
sheet relative to income, deductions
and tax are the same as on the
final tax return which Is usually
filed after the close of the year. A
table is included showing the COM
bined normal tax and surtax rates
applicable to the various income
brackets. The total of the income
tax (normal tax and surtax) plus
the victory tax Is then entered IN
line on the face Of the declara-
ton.
The law also permits taxpayers
to estimate the tax by computing
1t on last years income at this
years rates and exemptions, pro-
Visiad the nAvmeHlts are made on