MARCH, 1956
MSWi
PAGE 7
An Income Tax Dreai
(Based on informalion from the American In-
siiiule of Accountants, the national professional
society of certified public accountants.)
Tom looked at Betty over the breakfast coffee.
“You tell me your dream and I’ll tell you mine.”
“It’s not very romantic,” she said. “That old in
come tax blank was on my mind and I had a
nightmare. I dreamed I was sitting on a giant
calendar, turned to April 15, and as I finished
each page of the tax form another page was sud
denly added on!”
“It’s April 16 this year,” Tom reminded her.
“Anyway, I did better than that. I was dreaming
of all the things that would cut down my tax.”
“Such as?”
“Such as that you presented me with sextuplets
last New Year’s Eve—just in time to give us a
$3,600 tax exemption.”
“I did WHAT?”
. . and the tax-exempt interest on all my
holdings of state and municipal bonds,” Tom went
on, “and the special credit on about a million
dollars in dividends . . . and the depletion al
lowance on my oil wells. . .
BETTY RELAXED with a sigh. “You
dreamer!”
That evening Tom and Betty came down to
earth. They read the instructions which came
with the tax form and found some tax savings
they could use. Perhaps you can use them too.
For one thing, Betty had worked part time
and was planning to make out a separate return
to get back the tax that had been withheld from
her pay.
“Oh no,” Tom said, “if you did that we couldn’t
file a joint return. I’d have to use a separate re
turn and pay at a higher rate.”
MOST MARRIED COUPLES can save by filing
a joint return. Tom and Betty did so—and of
course they included Betty’s earnings and took
credit for the tax withheld by her employer.
They started to work on the regular Form 1040
and decided to fill out 1040 in detail instead of
taking the standard deduction,
Tom and Betty had the tax forms and instruc
tions on the table. They gathered together a
scratch pad, check stubs and a set of envelopes
containing the receipts they had collected during
the year. Tom went out to the car and got the
notebook he had been using to keep track of car
expenses. Now they were ready to begin tax
figuring in earnest.
“Let’s fill out a trial form first,” Betty said,
“so we’ll have everything right when we make
out the official return.”
After their names, address, and social securi
ty numbers, they came to the listing of exemp
tions. They put down only one exemption for
Tom and one for Betty, since neither of them
is 65 or blind.
“I don’t think we can list Bud as a dependent
^ny more,” said Tom, “since he earned $600 or
^ore last summer."
But they read further and learned that this
hmit did not apply to their son because he was a
f'ill-time student, so Bud’s name was listed for
^^other exemption.
“We can also list your mother,” Tom said.
“Do you think we can do that?” Betty asked.
“My brothers take care of part of her support.”
“No one of us provided more than half her
support,” Tom explained. “But if your brothers
will sign a new form called a Multiple Support
Agreement, we can take turns using the deduc
tion. If I ask them, perhaps they’ll agree to let
us use it this year.”
THE NEXT PART of the form caUed for their
income. They listed their wages and the amount
of tax withheld, copying the amounts from their
W-2 withholding slips. Their other income in
cluded savings bank interest and $38 of dividends
from a few shares of stock.
“Wait a minute,” said Tom, “that $38 goes on
the last page of the form, and we don’t have to
pay tax on the first $50 of dividends.”
“In fact,” added Betty, “you could have $50 of
dividends and I could have $50 and there’d still
be no tax.”
After listing their income and exemptions, they
moved on to the deductions.
“This is what I have been waiting for!” Tom
exclaimed, and he began copying columns of
figures from the check stubs and receipts onto
the scratch pad. While he was figuring the medi
cal deduction, Betty pointed to the instructions
on sick pay.
“You’re so right, honey,” Tom said.
He went back to the amount of his wages and
subtracted the pay he had received while sickness
kept him from work. The instructions told him
that an employee can exclude from his income
any payments up to $100 per week from his em
ployer (or insurance company) while absent from
work because of sickness or injury.
“I guess it was lucky I had to go to the hos
pital,” he added. “If I hadn’t been there at least
one day I would have to pay tax on the pay I
received for the first week I was sick.” He wrote
out a brief explanation to attach to the return.
HAVING SUBTRACTED his sick pay from his
wages, Tom went back to the medical expenses
and figured that he was entitled to nearly $100
deduction because he had spent that much more
than 3% of his gross income—not counting bene
fits from health insurance. From his notes on the
scratch pad he worked out other deductions: in
terest paid on the mortgage and on a small loan
from the bank, charitable contributions (includ
ing the value of clothing and other goods given
to the church rummage sale), real estate taxes on
their home, sales taxes and the damage done to
their roof in a storm.
“Why did you bring the car expense book?”
Betty asked.
“Gasoline tax,” was Tom’s reply, as he added
up his deduction for the state tax on gasoline
he had purchased during the year.
“Now what are you doing to do with that child
care deduction?” Betty exploded. “You’re really
getting deduction-happy. I can hardly remem
ber when Bud was under the age of 12!”
“It’s not for Bud,” Tom explained. “The same
deduction applies to care of a disabled dependent.
Remember, we had a woman in to take care of
your mother while she was staying with us and
you were working?”
“Look a bit further, dear,” said Betty, pointing
to the instructions. “It says the maximum deduc
tion of $600 for ‘child-care’ must be reduced by
the amount our gross income exceeds $4,500—in
other words, since our income was more than
$5,100, no deduction for us!”
TOM HAD TO ADMIT his wife was right. Al
though he was disappointed this time, he found
that he had listed enough legitimate deductions
to make them eligible for a refund. As both of
them signed the return, he said.
“I’m glad we started this early. The sooner we
get it in, the sooner we’ll get our refund.”
Note: Tom and Betty found that they could fill
in their own tax return with the help of the of
ficial instructions. Probably you can too. If you
have questions you can telephone the Internal
Revenue Service. If you have problems that re
quire independent professional assistance, be sure
your advisor is properly qualified.
^hen Child
Swallows Trouble
c
a child swallows anything
^'^en suspected to be harmful,
family doctor ought to be
Contacted immediately, the Na
tional Safety Council urges.
There are many household
items in addition to commonly
recognized poisons that are dan
gerous, if not deadly, when swal
lowed in sufficient amounts.
If no antidote appears on the
label of the container, the Coun
cil recommends the “universal
antidote,” a mixture that can be
obtained at any drug store. When
it’s an emergency, a simple an
tidote may be quickly prepared
at home. Ingredients given by
the council are: a slice of burned
toast, one tablespoon of milk of
magnesia, and one cup of liquid
tea, hot or cold.
INQUIRING REPORTER
Green Thumbs Reveal Plans
For Summer Garden Projects
Someone once said that faith and hope will never die,
so long as seed catalogs are published. March has come again
and another springtime reminds us of the renewal of life.
The good earth calls. Here, then, are six employees’ plans for
their summer gardening projects.
SALLY SPENCER, Spinning.
I love flowers of all kinds, but
care most for those that live
from year to year. So I’ll soon
begin to tend my crysanthe-
mums and hydrangeas at home
in Hickory Grove, S. C. They
must be fertilized, watered if a
dry season, and hoed sometimes.
They’ll require some grooming,
too.
BUSTER STILES. Machine
operator in Plastic Dip. Here
about 8 years. I plan to raise a
variety garden, with a balanced
line of vegetables. Corn is a
favorite plant. Have already set
out onions, planted carrots, beets
and potatoes. I figure on using
compost as a fertilizer, and a hoe
and my hands to fight the weeds.
JOHN L. FOSTER, Warp man
in SYC Weaving. Here since
1943. My plans for a garden at
the place I live, 815 South Vance
street, include provisions for the
regular run of vegetables, such
as beans, tomatoes, potatoes. I
sow a seed bed for tomato plants
but buy most other seeds. A hoe
and a plow are the best weed
killers.
ALONZO SETZER. Nine years
of service, all in the Warehouse.
I plan to set out onions and cab
bage in early March. Other vege
tables raised on my IV2 acres
at Bessemer City will be, okra,
lettuce, squash, corn, beans, po
tatoes and beets. Each summer I
cultivate carefully, using lots of
fertilizers.
ARTIE LINEBERGER. Card
ing. Growing dahlias is my chief
gardening interest at home on
Union Road. For spring plant
ing I take tubers which were
stored last fall, set them and
keep them watered well. I’ll
hoe them faithfully, as usual,
and when they bloom this sum
mer, I’ll keep the blooms cut to
give room for more blossoms.
ANNAS TARTE, Weaving
splicer. I like potted plants es
pecially. One of my rubber
plants is six years old and the
largest in this part of the coun
try, so far as I know. I’ll have
about 25 different potted plants
this summer. Woods dirt, com
mercial plant food and vegetable
waste, with lots of care, will
make them thrive.