| Show I T Normal Tax Surtax Constitute Major Maior jor Parts of Income Levy Editors Editor's note This note Is h the fourth of a Cf series of articles regarding the federal Income tax talC under the revenue act of 1942 Information has hat been supplied by the bureau of Internal revenue Principal question in the minds of many persons now is Just how much w will l my ray tax ax be and nd h how w do I figure it t out The federal li income me tax payable op ithe the taxa taxable le iI income come is di divided divided divided di- di vided into two pants pads the normal tax taX and th the surtax x The sum of these two taxes in all ordinary cases cases r represents presents the total tax du due Exceptions Exception arise when there I have been specified d capital gains or losses and an n alternative computation computation com corn is p permitted The surtax is computed afe aV variable varIable vari varI- van van- able rates dependent upon the amount of sur surf surtax X x n net income Surtax Surtax Surtax Sur Sur- tax net income is 15 the amount of the thenet the net income g gross ss Income less deductions 1 l less ss the personal exemption exemption exemption ex ex- ex- ex emption and cr credit dit for dependents This is the amount on line 23 of off f form tm i A 1040 10 f The surtax amounts to 13 per percent percent percent cent on the e first irs 2000 of the surtax surtax surtax sur sur- tax net income and increases as the amount of the surtax net in income income income in- in come increases The maximum rate of from 77 17 to 82 per cent applies to incomes in excess o of ot Under Tindel the old law the maximum applied to income over The computation of the tax for each Income blo block k is given in a a. table accompanying the return form The normal tax is a flat 6 per percent percent percent cent of the balance subject to normal nor nor- nor normal ormal or- or mal tax Th This s balance is comp computed ted by deducting ting from the surtax net income the earned income credit I I interest received on certain ertan types of United States government bonds and bonds of or federal instrumentalities instrumentalities instrumentalities and dividends on share accounts accounts accounts ac ac- ac- ac counts in federal savings sayings and loan associations issued prior to March 28 1942 1912 Earned income credit is 10 per percent percent cent of the earned net nel income but not in excess excess of 10 per cent of thenet thenet the thenet net income If th the taxpayers taxpayer's net net Income is not greater than I Ithen then the earned income credit is taken as 10 per dent cent of the net income income Ui tH t Ss Is entire i net nef et in income in- in II come com is considered as as as arned earned net income If the taxpayers taxpayer's net in income income in- in inI I come coma exceeds the earned income credit is 10 lOper per cent of the thenet thenet net income or the earn earned d net in income income in- in come com whichever Is the smaller but in any case at at least Earned net income is the earned income earnings from n employment employment employment employ employ- ment less earned income deductions deductions deductions deduc deduc- ordinary and necessary expenses expenses expenses ex ex- ex- ex incurred in conn connection with such employment The m maximum earned income credit which any taxpayer er may take is 1400 This would occur when both the net income income and the earned net inc income me were or more |
