The Waterbury Democrat., 1945-01-05
YOUR FEDERAL INCOME
 TAX OUR INCOME TAX SYSTEM
No. 3


 or blanks, prescribed by regulations, as a basis for closing their tax ac- count for the year See article No. in this series.
 For individuals, either of two forms of return may be uSed-the regular return on Form 1040 or a simpler Form W-2 (RevD, printed on the withholding tax receipt which the employers are required to furnish to the employees at the close of each year.
 The Forms l040 are obtainable from any collector of internal rev. enue and, generally, from any bank. Other forms are designed for cor porationS, for partnershisp, for trusts and fiduciaries, and for non- resident aliens. Farmers who keep no books of account and use the cash method of reporting income must attach a special schedule (Form 1040FD to their returns.
 Withholding Receipt Return, tlTe of the present law is a provi- sion under which most wgae earners may choose simply to answer few questions about income and exemp- tions on a Withholding Receipt. Form W-2 (RevD, attach to 1t all other Withholding Receipts for the year, file it as an income tax return, a dnhave the collector figure the tax for them. Three conditions must be met before the wage earn- CT may take advantage of this, privilege--(a) his gross income for the year must be less than $5,000) (b) 1t must be derived entirely from wages, dividends, or interest: and Co the part of his income other than wages that were subject to withholding must not be more than $1O0. Accordingly. a Withholding Receipt cannot be used as an in- come tax return by a person who received any income from rents, an. nunities, business, partnership, an estate, or trust; nor can 1t be used for reporting gains and losses from the sale or exchange of prop erty. For such purposes, the Form 1040 should be used
 A husband and wife may combine their income on a Withholding Re- ceipt if their combined income k within the limits stated above, dvid- cordance with State laws. If they do so, the collector will figure the tax jointly and separately, and will use the smaller amount as their tax liability. If their combined ir- come exceeds these limits but each individually, is eligible to use the withholding Receipt type of re- turn, each may do so and hte tax will be computed by the collector as separate returns, except in States with community property laws that Is, Arizona. California, Idaho Loupisiana, Nevada New Mexico Texas, and Washington. In these States, one-half of the earnings of husband or wife belongs to each one and therefore, the income and the credit for income tax withheld by the employer hwich would be reoprted by each in a separate re- turn would not correspondent to the employers statement of earn- ings and of tax withheld from wages as shown in the Withholding Re- ceipt. Accordingly, if a husband and wife in State with community property laws desire, for any req son. to file separate returns, they must use orm 1040. Tn general, If a husband and wife file separate returns, one may not use the With holding Receipt as a return If the other itemizes deductions on page of form l040.
 This Withholding Receipt return has no entries for deduction Of
 expenses, for the collector who computes the tax will use tax table which is shortcut method Of flnd- ing income tax. (Since travelling salesman or other person who wishes to deduct travelling or reimbursed expenses in connection with em- 1 ployment cannot deduct such eX- penses in Form W-2 (Rev). he must file the regular return on Form 1040). This tax table allows for (and thus saves the troble of figuring) three different factors that infiu- cIICt LIlt bIIlOlIII Ol LIlt bdA, LlhiIiC- ly, (a) a standard deduction equal 1 to 10 percent of adjusted gross in- come (based on the midpoint of i each income brackeD. which takes 1 the place of allowable personal de- ductjons generally and of certain credits: (b) the normal tax eXemr- , tior which. in a return that includes ! the income of only one person, is fat $500: and (c) the surtax ex- emption. which is $500 for the tax , payer. $500 for each dependent rela- 1 tive iistad in the return, and $500 { for the taxpayers wife Or husband in cases where she or he has no gross income (and Is not a de- i pendent of ancthe- taXpayer), or joins in a combined or joint return, The tax table iS' prescribed by law. and therefore gives the correct tas for everyone who Is eligible for It's use, including wage earner filing the Withholding Receipt return even though the 10 percent standard deduction may be larger than his actual deductions and credits.
 When the collector has figured the amount of unpaid additional tax due, if any. he will send bill to the taxpayer. This bill must be paid within 30 days after its mailing. If the amount of tax withheld exceeds the tax due. Q refund will be made