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Show Citizens Filing Income Returns . - r- - b t: : Co . .v ; iv..; i . ;T : ft Q ; " , y , Because of the lowered income tax base this year, a considerable number of citizens will pay taxes for their first time. Federal income tax officials will be on hand to assist such crowds as this one in filing: their returns. "Come early, avoid the rush," is the advice which officials of-ficials again offer this year. In addition to being the chief financial finan-cial support, the head of a family must be related by blood, marriage, or adoption to his dependents, and he must have a legal or moral obligation ob-ligation to exercise family control over them and provide for their care. It is not always necessary that a taxpayer and his dependents live under un-der one roof the entire year in order or-der that he be allowed the exemption exemp-tion given the head of a family. In computing a federal income tax, the taxpayer is confronted with the problem of ascertaining, (1) his gross income and, unless the tax is computed under the optional simplified sim-plified method, (2) his net income, and (3) his surtax net income. The instructions which accompany the forms clearly and explicitly set out how this is done. If, after reading them carefully, the taxpayer does not understand them, he should consult con-sult the nearest collector, or deputy collector, of internal revenue. Farmers' Income Tax. Farmers, which include livestock raisers, fruit and truck growers, poultry raisers, and operators of plantations and ranches, are liable for federal income-tax returns provided pro-vided their income is sufficient to require the filing of returns. Primarily, Pri-marily, due to the reduction in the credit for personal exemption, many farmers will be Uable for returns and to the tax for the first time for the year 1941. pensation for personal services, dividends, interest, rent, annuities, or royalties, and does not exceed $3,000. A new Form-1040A has been provided for taxpayers who are entitled en-titled to and elect to use such method. meth-od. A table on the reverse side of the form shows the amount of tax on increasing amounts of gross income in-come after the proper allowance of $400 for each dependent. Notes for Taxpayers To make it easier for taxpayers to meet the increased taxes required by the national defense program, the treasury department is offering for sale two series of notes, both dated August 1, 1941, and maturing August 1, 1943. Salaried persons and wage earners earn-ers whose income is derived from personal services form the largest number of federal income taxpayers. taxpay-ers. This year this army of taxpayers tax-payers will be greatly increased. I Those who paid an income tax for 1940 have received the forms for the 1941 income tax return through the mails. In order that none may escape filing the return, employers are required to report the names of all their employees to whom, if single, they made payments of $750 or more in 1941, and if married, $1,500 or more. Neither the President of the United Unit-ed States, nor the vice president nor federal judges, nor members of congress, are exempt from filing returns. If a person is paid in whole or in part for his services by anything other than money, the fair market value of the thing taken must be reported as income. Amounts received as loans from the Commodity Credit corporation may, at the option of the taxpayer, be considered as income and included includ-ed in gross income for the taxable year in which received. The election elec-tion made with respect to the calendar calen-dar year 1939, or for the first year thereafter for which a return is required re-quired to be filed, is binding for all subsequent years unless the commissioner com-missioner approves a change to a different method of accounting. Amounts received under the soil conservation and domestic allotment act, as amended, the price adjustment adjust-ment act of 1938, section 303 of the Agricultural Adjustment act, as amended, and the sugar act of 1937 constitute taxable income to the recipients re-cipients for federal income-tax purposes. pur-poses. Income which becomes the property prop-erty of a person during the taxable year should be included in his gross income even though he does not have physical possession of it. This occurs where income is unconditionally uncondition-ally credited to his account or set apart subject to his order at any time, and such income is said to have been constructively received. Exempt Items. Certain items are specifically exempt ex-empt from the income tax and need not be included in the taxpayer's return of gross income. Among such items are the proceeds from life insurance in-surance policies paid by reason of the death of the insured. Amounts received (other than amounts paid by reason of the death of the insured in-sured and interest payments on such amounts and other than amounts received re-ceived as annuities) under a life insurance in-surance or endowment contract, which are less than or exactly equal to the premiums or consideration paid therefor, are exempt from federal fed-eral income tax. Any excess received re-ceived over the consideration paid is taxable. Amounts received as an annuity under an annuity or endowment endow-ment contract shall be included in For Deceased Persons. A return is required to be filed for a deceased individual if the gross income to the date of death is $750 or over, and the individual was single, sin-gle, or married and not living with husband or wife for any part of the taxable year, or if the gross income in-come to the date of death is equal to or in excess of the credit for personal per-sonal exemption (not including credit cred-it as head of family or for dependents), depend-ents), and the individual was married mar-ried and living with husband or . wife for all or any part of the taxable taxa-ble year. An individual, although a minor, who is single, or is married and not living with husband or wife for any part of the taxable year, is required re-quired to render a return of income if he has a gross income of his own of $750 or over for the taxable year. Domestic relations enter into the making of an income tax return. This shows itself in the matter of personal exemptions. The head of a family, as denned by the income-tax regulations, is an individual who actually supports and maintains in one household one or more individuals who are closely connected to him by blood relationship, relation-ship, relationship by marriage or by adoption. As such, he or she is entitled en-titled to a personal exemption of $1,500. A credit of $400 is allowed for each dependent. A dependent is one under un-der 18 years of age, or one who is physically or mentally defective and incapable of self-support. He need not live with nor be related to the taxpayer. Income taxes for 1941 are paid on normal tax net incomes and on surtax sur-tax net incomes. A study of the instructions in-structions that accompany the income in-come tax forms will show how to compute the tax on such incomes. The credit for dependents as well as the personal exemption is required re-quired to be prorated where a change of status occuns during the taxable year. For income-tax purposes there can only be one head of a family. gross income. Pensions and compensation received re-ceived by veterans from the United States for services in time of war are exempt, and pensions received from the United States by the family fam-ily of a veteran for services rendered ren-dered by the veteran in time of war are exempt The destruction by frost, storm, flood, or fire of a prospective crop is not a deductible loss in computing income. If livestock has been purchased pur-chased for any purpose, and afterward after-ward dies from disease, exposure, or injury, or is killed by order of the authorities of a state or the United Unit-ed States, the actual purchase price of such livestock, less any depreciation deprecia-tion allowable as a deduction in respect re-spect of such perished livestock, may be deducted as a loss if the loss is not compensated for by insurance in-surance or otherwise. |