Geauga record. [volume] (Chardon, Geauga County, Ohio) 1952-1962, 1954-02-04

HESS. Use LllS SERIES along WlLn
the official instructions tha t
accompany your tax forms to
help you make out your return.
Most Frequent Mistakes
According to the results of a
sampling by the Internal Reve-
nue. Service, the mistakes most
often made by taxpayers fall
into these four groups:
l. Incorrect listing of income.
This is the main source of er-
ror, partly because of debatable
questions involving business in
come. Individuals make m S.
takes on income, too, by leav-
ing out such items as interest
on savings accounts, dividends
and contest winnings, or by in
cluding items that are special
ly exempt.
2. Errors in personal deduc-
tionS. This category includes the
deductions taken when the STAN
dard deduction is not used
state and local taxes, interest
paid on loans, charitable con-
tributionS, medical expenses,
losses from fire and theft, etc.
3. Claiming too many or too
few dependents. Exemptions are
allowed for the taxpayer him
self and for certain persons he
supports IF they fit the def
initionS in the tax Instructions.
4. Faulty arithmetic. This is
the cause of the smallest num-
ber of errors, but 80 percent
of these mistakes are made by
the taxpayer against himself,
resulting in SO million overpay-
ment of taxes.
To File or Not To File
Everyone whose gross income
was $500 or more in 1858 must
file a return by March Is,
1854 Cor the 18th day of the
third month after the end of
your fiscal year.. Even if your
income was less than 5000, you
will have to file a return to
get back any tax that may have
been withheld by your employ
er. In any case, if you had as
much as $400 in earnings from
self employment you must file
a return to report these earn
ings for social security pur-
poSeSs
Which Form Is Best?
The easiest form is the SIM
plified Form 1040A, and you
may use it if your total in
come was less than S., 1000, con-
Sisting entirely of wages sub
ject to withholding Cor of wages,
dividends and interest, provid-
ed you did not have more than
$100 of such income outside of
that listed on your VIZ slips).
The Simplified form makes no
provision for Head of House
hold" status or itemized de =
ductions. If you use this form
the government figures your
tax and sends you either a bill
or a refund.
In order to figure your own
tax you must use Form 1040.
This can generally be used as
a "Shot FORM" if your income
was less than $1,000, and your
tax is taken from. a ia b e
which allows a deduction of
about 10 percent for contribu
tionS, interest paid, taxes, medi-
cal expenses, etc. You must use
Form 1040 as a Long form"
if your income was $1,000 or
more or if you wish to itemize
your deductions.
If your deductions are close
to 10 percent it is wise to
itemize them and figure your
tax both with the itemized de-
ductions and with the standard
deduction to see which wa y
results in the smaller tax.
Separate or Joint Returns?
Most married couples ca n
save money by filing a joint
return instead of separate re-
turns. This is because the tax
is figured on a joint return as
if the husband and wife each
had one half the total income
(even though the wife m a y
actually have had no income). q.
Income splitting, as this is
called, may bring the couple
down into a lower tax bracket.
Watch for exceptions, how
ever. If you had capital loss
es" or unusually high medical
expenses, you will be wise to
figure your tax on separate re-
turns and compare the tax on
both separate returns with the
tax you would pay On a joint
return.
Head of Household
What if you aren't married,
but you maintain a home for
one or more relatives who live
with you? You may be able to
qualify as Head of Household"
This is described in the tax
instructions. If you meet the
definition, you can figure your
tax at a special rate which
gives you approximately half
the advantage enjoyed by mar
ried couples who file a joint
return.
What Is Income?
Not all the money you re-
ceive is taxable income. You
should not include in your re-
+,1rNo n~xy ioh &c ieto