The midland journal., 1946-03-08
FACTS ABOUT WITHHOLDING
RECEIPT

By George Hofferbert, Collector of
Internal Revenue.
Editors Note This is the second
of series of brief articles, in ques-
tion and answer form, explaining
how to fill out your federal income
tax return.
@. My Withholding Receipt has no
place to list deductions. Why not? A.
If you use your Withholding Receipt
as return you get an automatic al
lowance equal to about 10 per cent
of your income. Ii you are entitled to
a larger amount of deductions, you
should file on Form 1040.
@. On the old form of Withholding
Receipt there was space for listing
exemptions for myself and my wife,
as well as our dependents. Why does
the new form of Receipt have only
one space for listing dependents? A.
To simplify the new form, provision
was made so that exemptions for
yourself and wife (unless she had in
come not shown on your retUrn) are
counted automatically.
@. Ny wife and both worked last
year. Is it cheaper for us to file sep
arate returns or combined return
on Withholding Receipt? A. If your
combined income is less than $1,000
you can file combined return on
your Withholding Receipt, and the
Collector will figure your tax ON
either the separate or combined basis
whichever method would give the
smallest tax or largest refund
Q. l worked several different
places last year and have a different
Receipt from each employer How do
l use them in filing return? A. Add
up your wages from all jobs and fill
out the last receipt you received. Do
not fill out the other receipts, but be
sure to attach them securely to the
receipt you did fill out.
@. Are there any special points to
watch in filling out a Withholding
Receipt? A, Write clearly, answer
every question that appliesS"to You,
and be sure to sign your name in the
signature space. Also be sure your
correct address is shown on TIE face
of your return.
The Short Form
@. Who can use Form 104O as a
"short form? A. Anyone whose in
come was less than $4,000, regard
less of the type of income. 1t is call
ed "short" because you tear off pages
and 4.
@. What is the advantage of using
the short fomr? A. You receive an
automatic allowance equal to about
10 per cent of your income in place
If listing personal deductions and
you can find your tax in table in
stead of figuring it by percentages.
@. Does the 10 per cent allowance
cover all kinds of deductions? A. No.
There are two kinds of deductions
personal and business. The 10 per-
cent allowance covers only personal
deductions, such as charitable con-
tributions, taxes, interest, medical
expenses and union dues. Purely bus
mess deductions such as travel ex-
penses of an employee, repairs of
landlord, cost of goods of mercE ant
and seed of farmer (subject to le-
gal limits explained on Form 1040)
can be deducted on either a short
form or long form return (but OF onn
a Withholding Receipt).
@. Do I count my own exemption
when select the exemption column
of the tax table which applies to me?
A. Yes. Count the names you are ELI
gible to list in Item l., Page /, Of
Form 1040. AS an example of how to
count exemptions, family composed
of husband, wife, and two child
rem, usually is entitled to four exemp-
tions.
Q. Should husbands and wives file
separate returns or joint returns? A.
Usually If their incomes are small,
Joint returns are convenient and do
not increase their tax. If their in
comes are large, separate returns US
ually result in less tax. When using
Form 1910, couples must decide for
themselves which method they pre-
fer. Mote: On Withholding Receipt
returns, combined return is best
because the Collector will figure the
tax by whichever method results in
smallest taxi
Next, Facts About The Long
Form.