Kankakee Valley Post, Volume 12, Number 11, DeMotte, Jasper County, 22 January 1942 — Here’s Guide for Tax-Payers [ARTICLE]

Here’s Guide for Tax-Payers

The Revenue Act of 1941 provides a simplified method of computing income tax in the case of individuals whose gross income is derived wholly from salary, wages or other compensation for personal services, dividends, interest, rent, annuities, or royalties, and does not exceed $3,000. A new Form 1040 A has been provided for taxpayers who are entitled to and elect to use such method. A table on the reverse side of this Form shows the amount qf tax on increasing amounts of gross income after the proper allowance of S4OO for each dependent, if any: The tax under the simplitjed method is the same for each $25.00 block ,of gross income and the taxpayer need only ascertain in whichj block his gross income (less allowance for dependents) falls to determine his tax. A flat reduction of 10 percent has been made in arriving at the amount of tax shown in the table for deductions such as charitable contributions and taxes paid, so that the taxpayer who uses this method does not list these but gets an automatic deduction of 10 percent. Under the simplified method the status of a person on the lest day of the taxable year is the governing

Prepared by Treanur\ Dept., Wash., Ih (..

factor in determining the exemption level ($750 for single persons and married persons not living with husband or wife, and $1,500 for married persons living together) as well as credit for dependents. A husband and .wife living |together on the last day of the taxable year may file separate returns on Form 1040 A if the gross, income of .each is from the prescribed sources aijid does ■M»t ex< eed $3,000, or they may file a single joint return on that Form if • heir combined income is from the prescribed sources and does not exceed $3,000, . The use of the simplified method optional with iho taxpayer but once an election has been made for any year, it is irrevocable for that year. U’f a taxpayer files a return unde-!' the sijuplified method for the taxable year he may, not thereafter file a return under the general provisions of the law for that year Conversely, if he files a return under the general provisions for any taxable year, he may myt thereafter file go return under the- simplified method for that year! However, a new election is allowed for each succeeding taxable year.