HOHT MTOTOHD (OREGOW) MAIL TRIBUNE
Friday, February 10, 1958
mount Paid as Wages During
Sickness Or I
Note: This u the fifth nd lmay not apply her unused ex-
ch by the. commoner of, . ' . . u,u-s:
Editor's
last di-spMch
internal revenue on problems arising
irora the iinnr of income tax returns.
Today's dispatch tells how to report
income from dividends and income re
ceived v.hen sick or retired.
By RUSSELL C. HARRINGTON
w Commissioner of Internal
Revenue
Written Fo The United Prets
Washington (U.R) Income
when you are sick- or injured,
income from dividends, and re
tirement or annunity income are
all subjects which continue to
give taxpayers trouble in filing
their returns.
On the basis of questions
which taxpayers have been ask
ing at Internal Revenue Service
offices in all parts of the coun
try, I shall try to set the picture
straight. .
Sickness and Injury
Accident or health insurance
payments and amounts you re
ceive as compensation for your
injury or sickness, are exempt
from tax.
The new law also permits you
to exclude rrom your income up
to $100 a week of pay you re
ceived under a wage continua
tion plan while you were sick
or injured, if it causes you to be
absent from work. But there is
a special rule for sickness. The
pay you receive for the first
week of absence from work can
not be deducted unless you were
hospitalized at least one day
of . the absence. The hospitali
zation does not have to fall
within the first week of sick
ness; just sometime within the
period of absence - from work
This first week proviso does
not apply in the case of absence
due to injury.
The amount you may exclude
from your income is limited to
the amount of wages, or pay
ments' in . lieu of wages, which
you received for -your absent
time, " but in &o .'.ease may you
exclude more than $100 per
week.
A Few Examples
If you are sick at home for
seven,; days or less, the pay you
receive is fully taxable. .If you
are sick at home for more than
seven days, the pay you receive
for the time after the first week
has run out may be excluded
from your income one-fifth of
your weekly pay (but not more
than $20) for each day missed,
if : you're on a five-day week;
one-sixth (but not more than
$16.67) if you're on a six-day
week. ;" .
li you are nospnaiizea at
least one day of your sickness,
you may exclude from income
the pay you receive for the en
tire period of sickness, up to the
$100. per week limit.
If you are absent from work
because of injury, your pay for
the entire time may be excluded
from your income; again, up to
the $100 per week limit.
If you make any exclusion
from your income for .sickness
or injury, be sure to attach a
statement to your return ex
plaining the circumstances.
Dividends
'; The 1954 law cut taxes on
your income from dividends in
two ways. It allows you to ex
clude the first $50 of dividends
ytfu received during the year,
and it allows you a credit against
your tax, up to 4 per cent of the
amount of dividends above $50.
Generally speaking, this liber
alization applies to dividends
paid on the capital stock of U.S.
corporations.
It does not include so-called
"dividends" paid on withdraw
able savings accounts at savings
and loan associations. They are
treated as interest income. Divi
dends paid by mutual life insur
ance companies on their policies
auu uy ijic vctcidua nuiiiillis-
tration on GI life insurance
policies are nothing more than
reductions of premiums paid and
are not Considered income for
tax purposes.
A Few Examples
A stockholder received $40
qualifying dividends last year.
He reports this but need not pay
tax on it, because the law lets
him exclude up to $50 of divi
dends. A stockholder received
$100 of dividends last year. He
reports the $100, excludes $50
and pays tax on the other $50.
On the $50 included in taxable
income, he can take 4 per cent
of it as credit against his final
tax liability.
. A man received $60 in divi
dends and his wife received $40.
He reports $60, excludes $50
and pays tax on $10, and takes
the 4 per cent credit on the
"taxed amount. She reports and
excludes her entire $40. She
elusion of $10 to her husband's
$10, even though they file a
joint return.
Retirement Pay and Annuities
Provisions for this type of in
come are somewhat like those
for dividends; you need not pay
tax on part of it, and you may
be able to claim a tax credit for
some of the amount you do pay
tax on.
You need not be retired to
enjoy these tax benefits, but in
some cases you must be 65 or
older.
Generally speaking, any con
tributions you made towards a
pension through the years comes
back to you tax-free.
On the other hand, if your em
ployer footed the bills, you are
probably taxable for the pay
ments as you receive, them now.
However, if you paid taxes on
the contributions he was making
to your pension fund, or if you
otherwise paid part of the cost,
you may now receive tax-free
the share you paid in. .-
Those are the general rules for
pension or annuity income for
which you are not taxable. The
law also provides rules for the
amounts on which you do pay
tax.
Under certain conditions, it
allows you a credit against your
tax. The credit is 20 per cent
of your retirement income, up
to a maximum of $240 per per
son. To be eligible for this credit,
you must have reached 65 by the
end of the year (unless you were
a civilian employee of the fed
eral, or a state or local govern
ment, and are receiving income
under a public retirement sys
tem). Includes Pension
If you are 65 or older, retire
ment income, for the purpose of
computing your tax credit, in
cludes pensions, annuities, inter
est, dividends and rent. If you
are under 65 -and are a retired
government worker, your only
retirement income on which you
can get a credit is that which you
receive under a public retire
ment system. In neither case
does retirement income include
money you are earning, now, and
it may be necessary to deduct
part of your current earnings in
figuring out your retirement
credit.
. One further qualification: You
or your deceased husband or
wife must have earned more than
$600 in each of any ten years
before 1955. The ten years do
not have to have been consecu
tive.
To end this series, which I
hope has been helpful to you, I
would like to repeat several
several points. - .
njiiry Explained by Dncome Tax Man
First, file your return as early
as you can. It works better for
you and us. Second, our job is
to collect every cent of tax due
the government, but nothing
more. Be sure you have figured
your tax correctly and have ex
plored thoroughly the various
sections of the law which may
apply to you and through which
you are entitled to seek relief.
Collecting taxes isn't a popu
lar job. But, we've got to do it.
Don't wait until the deadline
and I want to repeat that it's
April 16 at midnight and fill
out your form carefully. Errors
or filing late can make you liable
for payment of interest or penalties.
'" "' . ' '' ""'
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INTRODUCING HERSELF at Los Angeles Democratic meet
ing, Singer Pat Mowry, 23, third cousin of Adlai Stevenson,
meets presidential candidate. She is former Miss New Hamp-'
ehire and was a Miss Universe contestant. (International)
On The Side
(Distributed by King
By E. V. Durling
Features Syndicate, Inc.)
My distinguished colleague,
Louis Sobol, has bitterly com
plained that my astrological dis
sertations have a tendency to
ca'use dissenticn between him
and his beautiful ; and well
streamlined matrimonial mate.
Sobol threatens violence if I do
not cease reporting disparaging
claims made by astrologers as to
the character of females born
under Scorpio. I view this situ-,
ation with alarm. Already in
numerable Scorpions have
threatened to slap my face. Now
if I meet a Scorpion . and her
husband, she is likely to slap
my face and her spouse will add
to my injury and discomfort by
giving me a kick in the pants.
However, such are the dangers
those embarking on. a journalistic-
career must be prepared to
face. I will not be intimidated.
The column must go on! Still
I could try to square myself.
Therefore I call attention to the
fact that I have on many occa
sions stated that Scorpio women
are rated the "It girls of the
Zodiac." For confirmation of
this claim, see Grace Kelly, Mrs.
Louis Sobol,. Vivian Leigh and
Hedy Lamarr. Their virtues
more than compensate for their
faults. .They are sincere. When
a Scorpio girl calls her husband,
"darling," she really means it.
When she grows, affectionate,
she puts her heart, and soul into
it. When the poet said, "Each
kiss an earthquake," he was un
doubtedly referring to a Scorpio
girl. On the other hand, when
a Scorpio grows angry, she puts
her heart and soul into that,, toq.
When-she throws things at Jier
husband, she doesn't miss. Still,
rage is brief. She is soon in the
mood to kiss and make up. Kiss
ing and making up with a Scor
pio girl is a touch of paradise.
Or so say the stargazers. .
Asides
The first Hollywood "double
ring," ceremony was that of the
wedding of George Jessel and
Norma Talmadge . . . More ci
gars are manufactured in Penn
sylvania than in any other state
. . . What are your wife's meas
urements? Are they by any
Why Suffer Longer?
When Others Fail
COME TO US ACT NOW!
Our Nature's HERB remedies will help you to re-.
gain your good health. Our remedies have been
successful in aiding the sick all ever the state tor
over 18 years. '
1 B.
FONG
Herb. Specialist
Remedies for disorders, sinuses, heart, liver, stomach, gas and ulcers,
constipation, piles, asthma, female complaints, kidney, bladder, blood,
rheumatism, back and headaches. For Male, Female and Children.
BRANCH
OFFICES:
Aibany
Saiem
Eugene
North Bend
CHARLIE CHAN
OFFICE OPEN SUNDAYS ONLY
12 NOON TO 4 P.M.
CHINESE MEDICINE & HERB CO.
624 S. Riverside Medford
chance bust, 36; waist 23 and
hips, 36? If so, she rates the
classification of "three-dimension
girl.'"
Asking
Queries from clients. Q. Did
Jack . Benny ever team up with
with Nora Bayes in vaudeville?
If so, when? A. Jack played in a
vaudeville sketch with Nora
Bayes. That was about 39 years
ago.-. . . Q. Was Portia, the her-H
oine of The Merchant, of Ven
ice," a blonde or a brunette. A.
She was a blonde. Shakespeare
said of Portia,' "Her sunny locks
hang on her temples like a gold
en fleece.".
Passing By
Dan Arnstein. Taxicab tycoon
and deep student of transporta
tion and traffic. During World
War II Dan was assigned by the
United States government to
straighten out the traffic, on the
Burma Road. . . . Fred Caposel
la Jr., son of the. New York race
caller, who describes the, run
ning of the races in impeccable
English and with a slight touch
of a Harvard accent. Fred Jr. is
a "ham" radio operator. Such a
competent one that he has a rec
ord . of contacting 100 different
countries.
Please Note
-It is frequently claimed the
wage earning career of the aver
age film star is. comparatively
short. Let's look ' at the record.
All the stars voted the 10 fcest
box -office attractions of 1942,
just about 15 years ago, are still
drawing paychecks. The 10 best
of 1942 were: 1 Abbott and
Costello. 2. Clark Gable. 3
Gary Cooper. 4 Mickey Roon
ey. 5 Bob Hope. 6 James Cag
ney. 7 Gene Autry." 8 Betty
Grable. 9 Greer Garson. 10
Spencer Tracy.
Jealous Mate Holds
Three as Hostages
Sinton, Tex. (U.R) A "crazy
jealous" husband, who held his
pregnant bride and two other
persons hostage for two hours
in a barn surrounded by offi
cers, faced kidnaping, robbery,
burglary and car theft charges
today. . ' , ;
A funeral director and a po
lice chief got him to release two
of his hostages a brother and
sister by making up a phony
story that, their mother was dy
ing of a heart attack and wanted
to see them.
:The police chief, F. N. Turn
bow lives next door to the
brother and sister, who with
their mother were kidnaped
from their homes . yesterday by
Leonard . Rollins. . t
' Rollins, 24, later told Turn
bow that he had been" in asylums
twice and in reformatories
twice.
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