Your
Income Tax
WHAT IS INCOME TAX?
The federal income tax is, as
the name implies a tax levied up
on incomes, and it is payable in
relation to the amount of income.
Income, for Federal income tax
] imposes, means in general any
compensation for ones services,
v hether the compensation be in.
money or in goods or other serv
ices: it includes also the net value
received for the product ol ones
labor, as farm produce ;n the case
, f a farmer; income from invest:
merits; profit fn in business opera
tioiis; and other gains from sales
and exchanges of goods and prop
erty. Certain limited categories
cf income are, however, tax ex
empt, and to the extent of such
exemption are excluded in com
puting the tax.
Because of exemptions from the
tax given to persons having less
than certain stated Amounts of
income, as well, as because of va
i ious deductions and credits al
lowable, only a small proportion
of the number of persons receiv
ing income have until recently
been subject to the tax. Thus, of
tlie estimated 55 million persons
in this c; untry who receive in
come in one form or another
daring the calendar year 1941. on
ly some 26 million persons were
re<iuired to tile Federal tax re-;
turns f r that year, while of these
same 26 million, more than 9 mil-1
lion were not taxable due to
credits and deductions allow
able.
As a result of 'tile lowering of
exemptions, many , more persons
are now subject to the Federal
income tax than before, and for
the calendar year 1942 it is esti
mated that more than So million
persons will tile Federal income
tax returns. T > the large num
ber of persoi - now subject to the
Federal .income tax. who have
never reported income before for
Federal tax purposes! an under
standing of the la.-w and applica
ble regulations is of prime im
An income tax return is a dec
laration on the part f the tax
payer of his total taxable income
fm: the year, together with the va
rious deductions, exemptions, and
credits to which r.-e is entitled.
It is in reliance upon voluntary
disclosure, and the intergrity of
tax payers generally, that the cost
of administrate n of the income
tax can be kept at a minimum.
Though the return is a voluntary
statement, any person who will
fully makes a return which he
dt\e9 not believe to be true and
correct in every material matter
is subject to the penalties provid
ed by law.
The first requirement of the
law is the filing of an apprqpriate
return. For individuals generally,
this must be done by Ma*'ch 15
following the end of the calendar
year. The return must be filed
with the appropriate Collector of
Internal Revenue for the district
in which is located the legal resi
dence or principal place of busi
ness of the person making the re
turn.
L nder Che present law every
single person, and every married
person not living with husband
, r wife, having a total income
(earnings, together with other
income) of $500 or more, and
married persons living with hus
uund or wife throughout the tax
able year, who have an aggregate
income (total earnings of both
husband and wife, together with
other income) of $1,200 or more,
regardless of the amount of net
income, must tile a return.
FORM OF RETURN
Persons subject to the Federal
tax must report their income to
the Government on forms, or
blanks, prescribed by regulations.
These forms are, obtainable from
any Collector of Internal Rev
enue. and generally from any
bank. Special forms are desig
nated for corporations, for part
nerships, loi trusts and fiduci
aries, and foi nonresident aliens
Farmers who keep no books of ac
count on the accrual method must
attach a special schedule to their |
return (Form 1040F). For indi- j
vidua Is, two forms are used, de- j
pending upon the amount and i
source of income to be reported. I
Form 1040. This form is in '
tended for general use of iiuli-j
viduals who are citizens of the
United States, or residents in this
country, whether citizens or not. !
It contains spaces to show the am-;
ount of income from various sour- i
resi deductions allowable, exemp
tions and credits, and computation |
of tax liability. As most of these
items requite some explanation in
order to be allowable, the form I
also contains appropriate sched
ules to show in more detail how
the income or the deductions are
determined.
Form 1^40. This is a sim
plified report, which may. at the
option of the taxpayer who makes
his return on the cash basic, be
filed instead of form 1040 by citi
zens and residents whose gross in
c me was $5,000 or less during
1942. provided all this income
consists, wholly of one or more of
the following: salary, wages, divi
dends. interest, or annuities. In
using this form it is necessary for
dependents, and insert appropri
ate amount of tax in accordance
with one’s personal exemption
"Behind The Scenes
In American Business"
—By John Craddock— '
New Voik, Jan. IS.—ALL
OUT: What total war means to
Americans was maiie clear by
President Roosevelt in his annual
burget message to Ct tigress.
Whereas the budget for 1043
“was an instrument for trans
forming a peace economy into a
war economy,” that for 1044 fis
cal year beginning July 1 will re
fled. “the maximum program for
waging war.” A1J told, the chief
executive asked for $109,000,
000,000. of which $100,000.
000.000 would be for war expendi
tures alone—an outlay three
times those of Great Britain, and
14 times those of Japan. It is
twice the expenditures asked a
year ago by the President, four
times actual expenditures for the
fiscal year 1942, and 16 times de
fense expenditures for the fisial
year 1941. Half of the $100.
000,\000,000 is to be raised by tax
es. necessitating an additional
$16,000,000,000 in taxes which
are quite likely to be placed on
status, as shown on the table on
the reverse of the form. This
form has no entries for deduc
tions allowable, since the taxes in
dicated in the table on the back
of the form are computed after
taking into account what have
been considered average deduc
tions for persons of this income
class.
A taxyaper should, therefore,
consider carefully which form
would be appropriate for his pur
posees. Whichever form is em
ployed. all the information called
for in the spaces should be in
serted so far as applicable to the
taxpayer, in order to avoid the
expense to the Government, and
the possible inconvenience to the
taxpayer, of .subsequent .check
and inquiry.
With each return form is a set
of aeci mpanying instructions, and
these instructions should be care
fully read by the taxpayer be
for making his return.
Returns for the calendar year
1942 must be filed not later than
March 15, 1943 They may be
filed by mailing to the Collector
of Internal Revenue of the ap
propriate district in which he is
located the legal residence or
principal place of business of the
taxpayer. If the return is filed
by mailing, it should be posted in
ample time to reach the Collec
tcr’s office before March 15, 1943
Returns received later than the
due date are subject to a penalty
variable according to the lateness
in filing.
a ‘‘pay-as-you go" basis. To
critics who declare that sacrifices
of .Americans are riot comparable
to those of the British, it might
be pointed out that the effort re
quired to meet our own program
fully measures up to thf of any
of our Allies. Under the 1943
budget, the per capita burden of
the American effort is estimated
at $S97 against ?440 for Brit
ain.
MYTH EXPLODING — Ameri
can ingenuity has blasted the
myth of German superiority in
producing-precision optical instru
ments, machined to tolerances as
fine as 1-10,000 of an inch, are
flowing from plants of Mergen
thaler Linotype, Westinghouse
to exceed that of this country in
Electrica and llinneapolis-Money
well Regulator Company and the
latter's production alone is said
World War I. An example ol
the ingenuity that made this pos
sible is the system of humidity
control devised by Minneapolis
Honeywell engineers. One of the
bottlenecks of optical manufacture
has been the effect of humidity
on glass which, on some days,
halted production entirely. The
engineers discovered that glass
absorbs and exudes moisture—
minute amounts of water come
out of the glass and deposit par
ticles of soluble salt when humid
ity is falling, making the glass
sticky, and moisture stays within
the glass when humidity rises. Us
ing the know-how acquired in 58
years of devising temperature
controls, they hit upon a plan for
controlling humidity which makes
production i ossible, regardless of
the weather, for the tirst time in
optical history This system has
been made available to all com
panies manufacturing sighting
equipment for the armed forces.
THINGS TO COME: A new
strip cartoon magazine to be is
sued quarterly by Parents Mag
azine It will present true stories
of today’s heroes and heroines
A civilian ration kit pocket
size. with four tiny compartments
for sugar, coffee, butter and an
egg . . A new odorless garden
fertilizer, made mostly of gar
bage, by Jean MacLean Che v cal
Co ... A new non-wheat grid.de
cake mix. high in potein value, a
product to be marketed by Soy
! Fond Mills under the trade name
“Golden Sov.''
•NOTHING FOR SALE’: buy
ers Hocked to the American Fur
niture Mart in Chicago in record
numbers last week, but manu
facturers had little to offer. In
I fact, sales were rationed to keep
I down the volume of orders that
i would have set a new all-time
high and some even displayed
"Nothing For Sale” signs. One
of the most stringently rationed
items was upholstered furniture
—with either wooden springs or
: none at all. Modernistic furniture,
'much of it demountable—en
j ough for a four-room apartment
| could be packed in a 6x6x0 case
! predominated the market, ac
| counting ror oo per cent ui me
i total. Because of an increase in
j the birth rate. Lullabye Furni
i ture reported it -was 60 days be
i hind on deliveries. A survey by
| the Walnut Manufacturers As
j sociation showed exhibits of din
I ing room and bedroom furniture to
I be 47 per cent below 1941 and 33
| per cent less than last year. The
dearth of furniture was said to be
I partly due to the fact that 65 per
f cent of the nation's furniture
makers are selling- to the govern
ment and others are trying to
get war contracts.
TO THE RESCUE: Now that
gas and rubber rationing are
making stay-at-homes of ..millions
I of Americans, it isn't surprising
that old-fashioned games—the
kind that were popular in the
Gay Nineties—are coming back. 1
In fact, a survey of game popu i
larity bv Marshall Field & Com
1 pany of Chicago, turned up some
I interesting facts. Games 1 ike'
rook, parc-hesi, flinch and domin
os led the field. All sorts of games
| for two are being played more
i and more while chess and checker
| sets. popular with the armed
forces are in big demand And
children’s games aren’t old-fash
! icned. Today's kiddies are play
ing with toy soldiers and guns and
i tanks and other make-believe
'fighting equipment (fashioned
I from non-crmitical materials),
j War games which have captured
j the youngsters' imaginations' are
; “Commandoes.'’ “Flight Patrol.'
j “Flying .Aces." and the like. So
| instead of playing cowboy and
j Indian and cutting out paper
i dolls, the kiddies are working out
I technical war maneuvers and pre
' tending that they, like their big
brothers, are in the fight, too.
BITS O’ BUSINESS: It's the
department store buyers who
throw the parties now for manu
facturing sellers. reversing an
age-old custom. They’re eager
for anything they can find . .
Lockhead has put a new giant
transport- in the air capable of
spanning an ocean with a light
tank and its compliment of
troops. TTie huge plane is power
ed by four Wright 2,000-horse
I power aircooled radial motors
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The Chcrryville Eagle
At The Movies
IN CHERRYVILLE
I Playing — Thur. and Fri. < Lester Theatre
Playing Sun. Late Show-Mon., Tuea.
Lester Theatre
ANNOUNCEMENT
WE HAVE THIS WEEK COMPLETED MOVING OUR STORE FROM WEST MAIN STREET
TO THE KENDRICK BUILDING FORMERLY OCCUPIED BY McDOWELL BRO S.ON THE SQUARE.
THIS BUILDING HAS BEEN REPAINTED ON THE INTERIOR, AND WE ARE HAPPY TO
ANNOUNCE TO THE PUBLIC WE WILL BE BETTER PREPARED TO SERVE YOU IN THE FUTURE.
WE HAVE MORE ROOM AND OUR NEW STORE IS MODERN AND MORE CONVENIENT.
WE APPRECIATE YOUR PATRONAGE SIN CE COMING TO CHERRYVILLE AND WANT YOU
TO VISIT US IN OUR NEW BUILDING.
CHERRyVILLE, N. C.
Home Owned
DIAL 2281
Home Owned
LEE W. CAUBLE