The Waterbury Democrat., 1944-01-19
YOUR FEDERAL INCOME TAX
NORMAL TAX, SURTAX AND
 VICTORY TAX

VICTORY TAX
 The Federal income tax payable or lel3 is divided into three parts -the normal tax and the surtax. yhich together compose the regular Income tax: and the victory tax The total of these taxes, in all or 'linagy cases, represents the total |ax payable on 1943 income.
 Exceptions arise in cases involv- .nR computation of normal tax and 'urtax where there have been cer- ain capital gains or losses, in 'yhich case an alternative compu- ation is permitted, provided there re net long-term capital gains in xccss of net short term capital osses; or where a taxpayer holds onds with a tax-free covenant bonds in which the issuing corpor- ton pays part of the income tax n the interest,", in which case a eduction of the amount paid by he corporation is allowable against ne tax computed on the return. I On short Form 1040A, the com- lined normal tax and surtax is nown in a table and requires no multiplication. On long Form 1040, aese taxes must be figured separ- tely by percentage rates. The vic- ory tax requires percentage com- utations on both forms.
 Changes in these taxes are made rom time to time. but the rates nd methods in effect for l94S fol- Jw:
 Normal tax: This is Q hat 6 per- snt of all income after deducting ersonal exemption, credit for de- endents, earned income credit, de- uctions for charity, etc.
 Surtax: This is a varying per- sntage of your income but with swer deductions. Deductions al- owed in computing normal tax ut for surtax purposes are the armed income credit. interest on srtain Federal securities, and divi- lends on share accounts in Federal avings and loan associations, is- led prior to March 26. 1e42. The Irtax begins at 13 per cent on the rst S2,OO0 of income subject to rtax, proceeds at 16 per cent on e next $2,O00. 20 per cent on the ext $2.O00, and continues climb lg until 1t reaches g percent on Il income subject to surtax which Sceeds $200. 900. These steps in the lrtax are frequently called brackets, and if you hear some he speaking of being in the ',sur- K net income") is not more than 1000.
 If your surtax net income is lgher than $2.O00, each bracket of icome is still taxed at the rate for lat bracket, and the total surtax
 merely a total of the surtaxes 1mputed for each bracket. Thus.
 your income makes you subject the maximum slIrtax of 82 per- mt, that rate applies only to the irtax net income over &200. 900 nile each portion of the first 100 900 is taxed at lower rates. A sady means of figuring surtaxes
 provided in the instructions &C., ,mpanying long Form l040. The Instructions provide table which lows you how much the cumula- ve surtax is at the beginning of ach packet. For instance the tenth racket Is for surtax net incomes Ter e1e.0OO and under S20,000. In- cad of making 10 different cal- ilations. the table tells you that ie cumulative surtax on the first 5000 is $5.O40. If your surtax net lcome was sl0,O00, you would need aly to figure the tenth bracket lte of 46 percent on the 9l ,O00 in le tenth bracket, which would be l0O, and add the 45,040 to get your btal surtax of e5,50O.
 Victory tax: This is c temporary artirne tax. The exemptions and eductions are different and fewer nan in the case of either the nor aal tax or surtax. The tax is s ercent, less a credit (formerly alled postwar credit) which re- lices the tax by 0ne-fourth or lore depending on whether you re single or married, and how lany dependents you support. On lort Form l040A, the tax is ex- ressed as e net rate after allow hg for the credit. On long Form )lO, the tax and credit have to be gured separately because persons sing this form may be affected by mitati0us on the credit. These mits dO not affect tine user Of the aork form. which is restricted tc sgsons with not more than @3.00l