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1st Liberty Conv. 4%, 1947
1st Liberty Cony. 474%, 1947

of Third Loan
2nd Liberty 4%, 1942
2nd Liberty Conv. 444%, 1942
3rd Liberty 474%, 1928

Surtaxes, Excess-Profits and War

Profits Taxes on interest on aggregate of bonds (described in this group) up to 142 times amount of Fourth Liberty Loan Bonds (not exceeding $30,000) originally subscribed for and owned at the date of owner's tax return, until two years after the

date of the close of the war. Maximum for this group $45,000 of

bonds.

1st Liberty Conv. 4%, 1947
1st Liberty Conv. 474%, 1947,

of Third Loan
1st Liberty Conv. 474%, 1947,

of Fourth Loan 2nd Liberty 4%, 1942 2nd Liberty Conv. 474%, 1942 3rd Liberty 474%, 1928 4th Liberty 474%, 1938

Surtaxes, Excess-Profits and War

Profits Taxes on aggregate amount of bonds (described in this group) up to three times amount of Victory Notes (not exceeding $6,666.66) originally subscribed for and owned at date of owner's tax return, until

maturity of Victory Notes. Maximum for this group $20,000 of

bonds.

NOTE.-(1) The principal and interest of all Liberty Bonds and Victory Notes are exempt from any and all taxation by any state or any of the possessions of the United States, or by any local taxing authority, except estate and inheritance taxes.

(2) Federal estate and inheritance taxes can be paid with any of the following bonds at par and accrued interest, provided they were owned continuously for at least six months prior to the date of the death of the owner: 1st Liberty Conv. 474%, 1947, 2nd Liberty Conv. 474%, 1942 of Third Loan

3rd Liberty 474%, 1928 1st Liberty Conv. 474%, 1947, 4th Liberty, 474%, 1938 of Fourth Loan

Victory Notes 434%, 1923

(3) Trusts and Partnerships.-In computing the foregoing maximum exemptions, each member of a partnership and each beneficiary of a trust is to be regarded as the owner of a proportionate part of the bonds or notes held by the partnership or held in trust and must combine such proportionate part of the bonds or notes so held with his individual holdings.

FEDERAL INCOME TAX.

INDIVIDUALS.

Q. Who must file a return?

A. Every individual having a net income for the taxable year of $1,000 or over if single or if married and not living with husband or wife; or $2,000 or over if married and living with husband or wife.

If a husband and wife living together have an aggregate net income of $2,000 or over, each shall make a return unless the income of each is included in a single joint return.

If the taxpayer is unable to make his own return, the return shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of such taxpayer.

Q. When must I file a return?

A. Any time after January 1st, but not later than March 15th.

If, however, the return is made on the basis of a fiscal year, it must be filed on or before the 15th day of the third month following the close of the fiscal year.

Q. Where must I file a return?

A. With the Collector of Internal Revenue for the district in which you reside, or where you have your principal place of business.

Q. Where can I get forms of return?

A. At the office of the Collector of Internal Revenue for your district.

Q. What is meant by net income?

A. For the purpose of determining whether or not a Return should be filed, net income means gross income (not including

1.

4.

5. Losses

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exempt items e. g. interest on municipal bonds) less certain of the deductions mentioned on page 16 and briefly shown in the following example: Gross Income

Deductions From all sources.

Business expenses... ........$4,200 (But not including income

Gifts to charities. ........... 50 free from tax, see p. 14)

3. Interest paid ................... 100 Taxes paid ......

50 Losses .......

300 6. Bad Debts

100 Deductions.....

5,000 7. Depreciation ............ 200 Net income........... „$1,000

$5,000 If unmarried you would have to file a return in this case because your net income is $1,000 or over, but if you are married you would not have to file a return because the net income does not amount to $2,000 or over.

Q. I have figured my net income as indicated in the preceding answer and find that I am liable to file a return. My personal exemptions (see next heading) however show I will have no tax to pay. Must I nevertheless file a return?

A. Yes.

Personal Exemptions and Credits. Q. Upon how much of my income am I allowed a personal exemption in computing the normal tax?

A. If a single person, a personal exemption of $1,000 or if the head of a family or a married person living with husband or wife, a personal exemption of $2,000.

A husband and wife living together receive but one personal exemption of $2,000 against their aggregate net income, and in case they make separate returns the personal exemption of $2,000 may be taken by either, or divided between them.

$200 exemption is also allowed for each person, per annum, other than husband or wife, dependent upon and receiving his chief support from the taxpayer, if such dependent person is under 18 years of age, or is incapable of self-support because mentally or physically defective.

In the case of a non-resident alien individual, who is a citizen or subject of a country which imposes an income tax, the personal exemptions shall be allowed only if such country allows a similar credit to citizens of the United States not residing in such country.

Q. What other credits am I allowed for the normal tax?

A. Dividends received from taxable corporations and also dividends from personal service corporations upon which income tax has been imposed.

Interest on obligations of the United States and of the War Finance Corporation which is included in gross income because subject to the surtax.

Rates of Taxes.
Q. What are the rates of income tax I will have to pay?

A. The rates of normal tax and surtax are given in the following table, except that in the case of non-resident aliens the reduction of the normal tax to 4% on the first $4,000 does not apply. Normal Tax for 1919 4% on first $4,000.00 of net income above Personal Exemp

tions and Credits. 8% on remainder.

Surtax on SURTAX

each bracket 1 to

5,000 exempt 5,000 to

6,000 i.e. $ 1,000. 1% $ 10.00 6,000 to 8,000 i.e. 2,000. 2%

40.00 8,000 to 10,000 i.e. 2,000.

60.00 10,000 to 12,000 i.e. 2,000.

80.00 12,000 to 14,000 i.e. 2,000. 5%

100.00 14,000 to 16,000 i.e. 2,000.

120.00 16,000 to 18,000 i.e. 2,000.

140.00 18,000 to 20,000 i.e. 2,000.

160.00 20,000 to 22,000 i.e. 2,000.

180.00 22,000 to 24,000 i.e. 2,000. 10%

200.00 24,000 to

26,000 i.e. 2,000. 11% 220.00 26,000 to 28,000 i.e. 2,000.

12%

240.00 28,000 to 30,000 i.e. 2,000.

13%

260.00 30,000 to 32,000 i.e. 2,000. 14%

280.00 32,000 to 34,000 i.e. 2,000.

15%

300.00

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19%

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34,000 to
36,000 i.e.
2,000.

320.00
36,000 to
38,000 i.e. 2,000.

17%

340.00 38,000 to 40,000 i.e. 2,000. 18%

360.00 40,000 to 42,000 i.e. 2,000.

380.00 42,000 to 44,000 i.e. 2,000. 20%

400.00 44,000 to 46,000 i.e. 2,000.

21%

420.00 46,000 to 48,000 i.e. 2,000.

440.00 48,000 to 50,000 i.e. 2,000.

23%

460.00 50,000 to 52,000 i.e. 2,000. 24%

480.00 52,000 to 54,000 i.e. 2,000. 25%

500.00 54,000 to 56,000 i.e. 2,000. 26%

520.00 56,000 to 58,000 i.e. 2,000. 27%

540.00 58,000 to 60,000 i.e. 2,000. 28%

560.00 60,000 to 62,000 i.e. 2,000.

29%

580.00 62,000 to 64,000 i.e. 2,000.

30%

600.00 64,000 to 66,000 i.e. 2,000.

31%

620.00 66,000 to 68,000 i.e. 2,000. 32%

640.00 68,000 to 70,000 i.e. 2,000. 33%

660.00 70,000 to 72,000 i.e. 2,000.

34%

680.00 72,000 to 74,000 i.e. 2,000.

35%

700.00 74,000 to 76,000 i.e. 2,000.

720.00 76,000 to 78,000 i.e. 2,000. 37%

740.00 78,000 to 80,000 i.e. 2,000. 38%

760.00 80,000 to 82,000 i.e. 2,000. 39%

780.00 82,000 to 84,000 i.e. 2,000.

40%

800.00 84,000 to 86,000 i.e. 2,000.

41%

820.00 86,000 to 88,000 i.e. 2,000. 42%

840.00 88,000 to 90,000 i.e. 2,000.

860.00 90,000 to 92,000 i.e. 2,000. 44%

880.00 92,000 to 94,000 i.e. 2,000. 45%

900.00 94,000 to 96,000 i.e. 2,000.

920.00 96,000 to 98,000 i.e. 2,000.

47%

940.00 98,000 to 100,000 i.e. 2,000.

48%

960.00 100,000 to 150,000 i.e. 50,000. 52% 26,000.00 150,000 to 200,000 i.e. 50,000.

56%

28,000.00 200,000 to 300,000 i.e. 100,000.

60,000.00 300,000 to 500,000 i.e. 200,000. 63% 126,000.00 500,000 to 1,000,000 i.e. 500,000.

320,000.00 Over 1,000,000

65% On page 4 will be found a chart in which the total Income Tax on stated incomes from $1,000 to $1,250,000 has been figured. This chart can be used in quickly estimating the amount of any individual Income Tax.

Q. If I have paid income taxes and war taxes in a foreign country will such taxes be credited against my tax in this country?

A. Yes. See section 222 of the Act.

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