This pamphlet prepared by our Counsel, Breed, Abbott and Morgan, is the fifth edition of "Practical Questions and Answers" covering the Income Tax Law. It also contains a digest of all of the Federal Tax Laws now in force affecting individuals, partnerships and corporations, except the tariff law, the tax on distilled spirits and certain other internal revenue tax laws of limited application that have been on the statute books for many years.

For a list of Irving publications, any of which will be forwarded upon request, see the final page of this booklet.

TAXES COVERED

Income Tax.......

War-Profits and Excess-Profits Tax...

Capital Stock Tax...

Estate Tax....

Special Taxes............

WHO AFFECTED

INDIVIDUALS

Income Tax.....

Executors, trustees, etc......

Information at Source...

Collection at Source......

Estate Tax..

Special Taxes.. .... .....

Non-resident Aliens.............

PARTNERSHIPS

Income Tax..

Information at Source.................

Collection at Source....

Special Taxes..

Non-resident Aliens.....

CORPORATIONS

Income Tax.......

Information at Source....

Collection at Source.

War-Profits and Excess-Profits Tax....--------

Capital Stock Tax.........

Special Taxes........

Personal Service Corporations.......
Non-resident Aliens..........

CHARTS

1 Income Tax....

2 Liberty Bonds.

3 War-Profits and Excess-Profits Tax................

APPENDIX
1 Text of Income Tax Act.....
2 Text of War-Profits and Excess-Profits Tax Act...............
3,000

110

INCOME TAX CHART
This chart and notes show total Income Tax, under the Revenue Act of 1918, payable for
the year 1919, by the head of a family or a married person living with husband or wife and
with no other dependents.
DETAILS OF COMPUTATION

DETAILS OF COMPUTATION
TOTAL Percent of Amount of Percent of Amount of

TOTAL Percent of Amount of Percent of Amount of
Normal Normal Surlax Surlax

Normal Normal Surtax Surtat
INCOME TAX

INCOME TAX
Tas Tax

Taz

Tax
$1,000 None Exempt None Exempt None 56,000 11,170 8%

4,160

7,010
2,000
None Exempt None Exempt None 57,000 11,520

8%
4,240 27%

7,280
4% $40 Exempt None 58,000 11,870 8% 4,320

7,550
4,000
80
80 Exempt None 59,000 12,230

4,400

7,830 5,000 120 120 Exempt None 60,000 12,590 8% 4,480

8,110
6,000
170
160 1% $10 61,000 12,960 8% 4,560

8,400
7,000
270 8% 240 2%

30 62,000 13,330

4,640

8,690 8,000 370

320 50 63,000 13,710 8% 4,720

8,990 9,000 480

400
80 64,000 14,090 8% 4,800

9,290
10,000 590

480
65,000 14,480 8% 4,880

9,600 11,000

560
150 66,000 14,870 8% 4,960

9,910
12,000 830

640
190 67,000 15,270

5,040

10,230
13,000
8% 720 5% 240 68,000 15,670

5,120

10,550
14,000 1,090

800
290 69,000 16,080

5,200

10,880
15,000
1,230
880
350 70,000 16,490

5,280

11,210 16,000 1,370 960 6% 410 71,000 16,910

5,360

11,550 17,000 1,520

1,040 480 72,000 17,330 8%

5,440

11,890 18,000 1,670 1,120 7% 550 73,000 17,760

5,520

12,240
19,000 1,830
1,200 8% 630 74,000 18,190

5,600

12,590
20,000 1,990
1,280 8% 710 75,000 18,630

5,680

36% 12,950
21,000 2,160
1,360 9% 800 76,000 19,070 8% 5,760

13,310
22,000
2,330
1,440
77,000 19,520

5,840

13,680 23,000 2,510 1,520 10% 990 78,000 · 19,970

5,920 37% 14,050 24,000 2,690 1,600 10% 1,090 79,000 20,430

6,000 38%

14,430 25,000 2,880 1,680 11%

1,200
80,000 20,890

6,080 38% 14,810
26,000 3,070

1,760 11% 1,310 81,000 21,360 8% 6,160 39% 15,200
27,000 3,270

1,840 1,430 82,000 21,830

6,240

15,590
28,000
3,470
1,920 12% 1,550 83,000 22,310 8%

6,320

15,990
29,000 3,680 8% 2,000

1,680 84,000 22,790

6,400

16,390 30,000 3,890 8% 2,080 13% 1,810 85,000 23,280

6,480

16,800 31,000 4,110 8% 2,160 14% 1,950 86,000

23,770

6,560 41% 17,210 32,000 4,330

14% 2,090 87,000 24,270

6,640 42% 17,630

8%
8%

8%

8%

8%

8%

15%

6,720

15% 16%

8%

20%
20%

33,000 4,560 8% 2,320 2,240 88,000 24,770

18,050 34,000 4,790 2,400 2,390 89,000 25,280

6,800 43% 18,480 35,000 5,030 2,480 16% 2,550 90,000 25,790

6,880 43% 18,910 36,000 5,270 8% 2,560

2,710 91,000 26,310

6,960 44% 19,350 37,000 5,520 2,640 17% 2,880 92,000 26,830

7,040 44% 19,790 38,000 5,770 8% 2,720 17%

3,050 93,000 27,360

7,120 45% 20,240 39,000 6,030 8% 2,800

3,230 94,000 27,890

7,200
45%

20,690
40,000 6,290

2,880
3,410 95,000 28,430

7,280

21,150
41,000 6,560

2,960
3,600 96,000 28,970

7,360
46%

21,610
42,000 6,830
3,040 19% 3,790 97,000 29,520

7,440

22,080
43,000 7,110

3,120
3,990 98,000 30,070

7,520 47% 22,550
44,000 7,390

3,200
4,190 99,000 30,630

7,600 48% 23,030
45,000 7,680 8% 3,280

4,400 100,000 31,190

7,680 48% 23,510 46,000 7,970 3,360 4,610 125,000 46,190

9,680

52% 36,510
47,000 8,270

• 3,440
4,830 150,000 61,190

11,680

52% 49,510
48,000 8,570

3,520
5,050 175,000 77,190

13,680 56% 63,510
49,000 8,880

3,600
5,280 200,000 93,190

15,680 56% 77,510
50,000 9,190

3,680
5,510 250.000 127,190

19,680 60% 107,510
51,000
9,510
3,760
5,750 300,000 161,190

23,680 60% 137,510
52,000
9,830
3,840
5,990 400,000 232,190

31,680 63% 200,510
53,000 10,160 8% 3,920 25% 6,240 500,000 303,190

8%

39,680 63% 263,510
54,000 10,490

4,000 25% 6,490 1,000,000 663,190 8% 79,680 64% 583,510
55,000 10,830 8% 4,080 26% 6,750 1,250,000 845,690 8% 99,680 65% 746,010
NOTES: INCOME:—The "Income” referred to in first column means NET INCOME arrived at as per following example:
Salary.. .
$2,000 Business Expenses........

$110
Dividends on Stocks........

300 Interest Paid Dealings in Stocks...-----...-100 Taxes Paid....

30 Profits from Business.......

1,800 Losses........ Interest, Liberty Bonds, if subject to surtax.......

100 Bad Debts... Partnership Profits—your share...... 1,000 Depreciation....

130
Other Taxable Income......
100 Gifts to Charities....

20
$5,400

$400
400
Net Income...

$5,000
Non-taxable income, i. e., gifts, interest on state and city bonds, certain nationa Ibonds, etc., is not required to be reported. See page 6
or status of interest on Liberty Bonds.

ADDITIONS TO THÉ ABOVE TAX:- If you are single and without any dependents as described in the Statute, your exemption from the
4% tax is $1,000, instead of $2,000 as shown in the chart, and the 8% normal tax will begin to apply at $5,000 instead of $6,000. The same applies
to a married person not living with wife or husband and without such other dependents.

DEDUCTIONS FROM ABOVE TAX:-(a) If you have dependents as described in the statute, your exemption from the normal tax is
increased by $200 for each dependent, resulting in a reduction of your normal tax as above computed by an amount not exceeding $16 for each de-
pendent, according to the size of your income.

(b) If your income includes dividends, your normal tax as above computed will be reduced by 4% or 8% (according to the size of your income) of the amount of your dividends.

(c) For status of interest on Liberty Bonds see page 6. Such interest, if subject to surtax, must be included in gross income, but is exempt from normal tax of 4%-8% as in the case of dividends.

20

10
80

LIBERTY BONDS AND VICTORY NOTES

TAX EXEMPTION TABLE Normal Income Tax.

Interest on all Liberty Bonds and Victory Notes without limit as to amount, is exempt from Normal Tax, until maturity. Surtaxes, Excess-Profits and War-Profits Tax.

Interest on Liberty Bonds and Victory Notes is also exempt from Surtaxes, Excess-Profits and War-Profits Taxes to the extent shown below.

The exemptions mentioned in the last four groups are in addition to those mentioned in the second group. • Description of Bonds

Exempt from 1st Liberty 372%, 1947

All Surtaxes, Excess-Profits and WarVictory Notes 334%, 1923

Profits Taxes until maturity.