The Courier News from Blytheville, Arkansas on January 24, 1955 · Page 10
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The Courier News from Blytheville, Arkansas · Page 10

Blytheville, Arkansas
Issue Date:
Monday, January 24, 1955
Page 10
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PAOIRN E (ARK.T COURIER vzwi MONDAY, JANUARY 24, 19BB Your Income Tax-6 New Credits Allowed By FRANK O'BRIEN AP Newsfeaturei (Note: The intern*! revenue service hw determined that some of tb* Instruction* in form 1040 for oomputinf the tax credit on retirement income are not a* intended by law. This article locates the incorrect instructions, and tells you the correct procedure, according: to the advice of the revenue service.) You an take a bite right out of your tax liability with two new tax credits provided by Congress in the new tax law. This is in addition to one big tax credit familiar to almost everyone— the credit you get for taxes already withheld from your salary through the year. And other previously allowed credits—for any estimated tax payments you may have made during the year, any refund coming to you from last year, and credit for any overpayment of social security tax resulting from working lor more than one employer during the year—may also still be taken. The same kinds of dividends eligible in figuring a tax exclusion, discussed in the previous article, are also eligible for figuring the tax credit for dividend income. But the credit is based only on dividends included in your income. You figure the credit in the' same Schedule J, at the top of page 4 of form 1040, where you figured your dividend exclusion. Here* is how the tax credit provisions work: First, dividend income—husband and wife lump together their divi- dent income eligible for a tax credit. But they must previously have ffffured their dividend income separately to get their exclusions, each excluding: only his or her own dividend income up to 50. And only dividends not excluded may count toward the lax credit. On your 1954 income, only dividends received after July 31, 1954, are eligible for a tax credit (Line 4 of column B of Schedule J.) After you have added up separately dividends received up to July 31, you deduct your exclusion or exclusions (up to 50 each on a joint return), taking all the exclusions out of dividends received up to July 31, if possible, but going over into dividends received after that date if necessary. The remainder of your eligible dividends received after July 31, 1964 is the part of your dividend income on which you may figure your tax credit. Your credit ic the smallest 01 these three: 1. Four per cent of the remainder of your dividends received after July 31, 1954 after taking out any exclusion. 2. Your tax (after taking a credit for any foreign income tax paid). 3. Two per cent of your taxable income. Whichever of these is the smallest, you can deduct frini your tax liability (which you find in the tax table or compute). You deduct your dividend credit from your tax liability at line 8A on page 1 of form 1040. Second, retirement income credit —(Both husband and wife may claim separately. You need not be a formally retired person to claim retirement income credit.) Taxpayers who are under 66 may claim as retirement income to be used to get a tax credit only taxable income received under public retirement .systems. This eliminates pay from social security, and railroad retirement, gecause they are tax exempt. And it eliminates commercial retirement pay and annuities, and armed forces retirement pay. Taxpayers who are 65 or older can claim for a retirement pay tax credit all taxable income in the form of pensions, annuities, interest, rents and dividends. Eligible for use in getting a credit are taxable state, municipal and U.S. Civil Service retirement plans. Here are two general rules to figuring retirement income credit: 1. You must have earned over $600 income during at least 10 years (not consecutive years, necessarily), previous to 1954. 2, The retirement income you may use in computing your credit will be the smaller of the following two figures: —Your actual, eligible retirement Income, or —*1,200. reduced by any income you received in 1954 from the following: ^ 1. Social Security. , 2. Railroad retirement. i 3. Veterans pensions. In addition, if you are under 75 years old, you must deduct any pay you received during 1954 for personal services (work of any kind) over $900. If you ore 75 or over there is no limit to the amount o! WE'VE GOT IT! Over 33,000 different items in stock! HUBBARD HARDWARE WE BUY USED FURNITURE PHONE 3-3122 Wade Furn. Co. HE "SCARES" UP SALES—Pierre Dupuy, a Parisian sidewalk vendor, seems to think the best way to sell his stockings is to scare the wits out of his customers. He uses this technique to prove the no-run quality of his merchandise. His novel approach is gaining him fame as one of best-known boulevard vendors. pay you may receive in addition to your retirement income, without having to deduct it from the $1,200. In making these calculations it will be necessary to correct your form 1040. The internal revenue service has determined that the instructions about retirement income are not what the law intended in two instances. The erroneous instructions in the tax form direct you, on line !i schedule K, to enter the smaller of: 1. Your eligible retirement in- come. 2. §1,200. And line 5 of schedule K directs you to enter the balance you get after subtracting the result on line 4 from what you enter at line 2. It has now been determined that this is not what the new tax law intended. The other lines in the schedule are not affected. If you will take a pencil and make the following corrections on your form in schedule K, you will have the correct direction! for computing your income tax credit. Make line 2 read: "Enter here $1,200 . . ." Make line 5 read: "Balance (line 2 minus line 4), or line l, whichever is smaller." •This allows you to compute your retirement income tax credit on the smaller of: 1. Your total eligible retirement income. 2. $1,200 reduced by what you must deduct in lines 3A and 3B. • Your retirement income credit is 20 per cent of the smaller of the above two. If you worked for more than one employer in 1954, it is possible that more than the amount you should have paid as social security tax his been deducted from your income. In no case should the social security deductions total more than $72 for 1954. If they do, you can claim a tax credit for the excess, on line 11 of form 1040A, or in the "Income Tax Withheld" column of item 2, on page 1 of form 1040. Mark the entry "F.I.C.A. tax" in the "where employed" column. * • * At this point, all the ground necessary to filing form 1040A has been covered. Remember, you may not use form 1040A if you want to claim credit against your tax for dividend income, or for retirement income. If you wish to do so, you must use form 1040. The following articles will deal with deductions that can be made only by using form 1040, and with other .income that can be handled only on that form. If you file form 1040A, your district director will figure your tax, giving you your exemptions and the standard 10 per cent deduction for personal expenses, plus credit for any excess social security payment you may have entered on line 11. (NEXT; Employee business expenses.) WhenpllB P3in Won't Let Up Send for this FREE BOOK Then you'll know why ointments- salves—"home remedies," etc., so seldom give real or lasting help for piles, fistula, colon and rectal'trou- bles. Find out what you really should do, how 75,000 others have been helped, under clinic plan that carries an actual written guarantee. Write, today, for FREE Book 'RECTAL AND COLON DISEASES' Thornton Minor Hospital, Suite 1372, 911 E. Linwood Kansas City 9, Mo. JACKETS Smart New Styles in Gabardine and Poplin Hip Length - 100% Wool Lined-All Sizes r 2 PRJCE Regular 19.95 Values. 9 95 NYLON JACKETS Beautiful Fabrics In White,. Blue, Red Complete Sizes Regular 19.95 14 95 POPCOATS The new style that's sweeping the nation Pink-Yellow-Red-Blue-White Regular 18.95 10 95 "Where The Man Who Knows — Buy* Hit Clothtt" R. D. HUGHES CO. Alan Berry Home Owned and Operated Fred Sandefur FFA WINNER—Marvin Brown, son of Mr. and Mrs. W. O. Brown of Leachville. took first places in cotton, corn and meat production in Future Farmer of America work and will attend the state FFA winners banquet in Little Rock Tuesday with Arnold Watkins, his instructor. The Imperial British state crown, which was made for Queen Victoria In 1838, contains a total of 3092 diamonds, pearls, emeralds, rubies, and sapphires. Bandit Lorn Monty • PHILADELPHIA (fl — A bandit loat money during an attempted holdup at a clothing store. He purchased a M.M jacket and handed Mrs. Edna Rosen, 52. wife of U» proprietor, a W bill. As she turned to hand him the one cent change he pointed a paper bug at her and demanded money. He said the bag contained n pistol. Mrs. Rosen screamed and he fled without the penny. Other Name* The Mazarln Bible Is another name for the Gutenberg Bible. It Is also sometimes called UM "Forty-Two Line Bible" oecaui* there were 42 lines of type to a column. mencan NON-CANCELLABLE PROTECTION FOR THE WHOLE FAMILY Ages 1 Day to 80 Years Pays Liberal Cash Benefits For Hospital and Surgical Expenses American Insurance Co. of Texas Blytheville, Ark. Mrs. Louella McFall Phone 3-3319 Comes to BLYTHEVILLE At Your Favorite Grocers' Now! More Arkansas Families use Terryland Milk than any other kind! Remember... all Terryland products are completely laboratory controlled for your protection. TERRYLAND OF ARKANSAS

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