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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (Feb. 21, 1958)
Troublesome Questions About Taxes On Certain CCinds off income Answered Editor's note: Thli ii the last of five articles designed to assist in filling out and 111 i nr. federal in come tax forms. The series was prepared especially for United Press by Russell C. Harrineton commissioner of internal revenue, By RUSSELL C. HARRINGTON Commissioner of Internal Revenue (Written for United Press) Washington HP) In the 111th and final article in this series, I shall try to answer tome often troublesome ques tions about taxes on certain special forms of income. Broadly speaking, there are special rules affecting taxes on pay while you are sick, dividends you receive and money from annuities and pensions. Sickness and Injury Exempt from tax is money received as compensation for your injury or sickness. Sick Pay If you are protected by a plan financed by your em ployer which continues your wages while you are absent from work because of injury or illness, you may exclude from your income up to $100 a week of such payments. There are several special rules governing sick pay ai lowances that can be best ex plained with several exam pies: If you are sick at home for seven days or less, the pay you receive may not be ex cluded from your income. It Is fully taxable unless you are hospitalized at least one day of your sickness. If you are hospitalized for at least one day, you may ex clude the entire amount of pay you receive during your period of sickness, up to the limit of $100 per week, whether you be sick for less than a week or for many weeks. If you arc sick at home for more than a week without ever being hospitalized, the pay you receive after the first week may be excluded from your income one-fifth of your weekly pay (but not more than $20) for each day missed if you are on a live day week; one-sixth (but not more than $16.67) if you are on a six-day week. You may deduct your pay (again up to $100 a week) for the entire time you are absent from work if the absence is caused by injury received on the' job or elsewhere. If you make any claims un der these provisions, be sure to attach a statement or our new Form 2440 to your re turn to support the claim. Diyidends You may deduct the first $50 of dividends you received during the year. You also may take a credit against your tax up to 4 per cent of the amount of dividends above $50. Generally speaking, these rules apply to dividends paid on the common and preferred INCOME TAX TIPS Washington IIP Before you seal the envelope and mail in your tax return, be sure you have: Signed your name on the proper line. If it is a joint return, your wife must sign too Attached copy B of the forms W-2 from your em ployers showing how much you earned last year. Included a cheek or money order for any addi tional lax you owe. Checked the right blocks for personal exemptions and properly listed depend ents. Go over your addition, subtraction and other com putations to see that they contain no errors. Printed your name and address legibly. stock of U. S. corporations. They do not apply to so-called "dividends" paid on with drawable savings accounts at savings and loan associations, mutual savings banks and the like. Veterans Administration dividends on GI me insur ance policies are not consid ered income lor tax purposes Here are some examples about taxation of dividends a stockholder received $40 in dividends last year. He re ports this but need not pay .-.-.a,rTi iiiilnfriimir'i - 'f 'f i ' ' " ' i r That's a stiff price to pay for not knowing that Stat Farm Mutual . . . the careful driver insurance company . . . charges far less than most other companies. Yet our policyholders enjoy the finest full-time coast-to-coast claim service. How much can you save with State Farm? Your nearby State Farm agent can tell you quickly. Call bin today. MEDfORD AGENTS: John A. Carter VlrrU R. Wilkes I 113 South Central f Phone SP 2-9322 Donald 1. Day 1671 Grand, Phone SP 2-5038 ASHLAND AGENTS: Henry H. Doris Allen McGee 3ft E. Main Phone MU. J-8418 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY HOMI OFFICE I 8LOOMINO.TON, ILLINOIS f V STATI FAIM 3 INSUKANCI tax on it because the law lets him exclude up to $50 of div idends. Another stockholder receiv ed $110 of dividends. He re ports the S110, excludes the first S50 and pays tax on the other $60. Of the $60 includ ed in taxable income, he may take a 4 per cent (or S2.40) as a credit against the final amount of tax he owes. That is, he may subtract the $2.40 from his tax liability and pay the remainder. Next, consider a man and his wife, he with $60 of divi dends and she with $40. He reports S60, pays tax on only S10, and takes 4 per cent of the S10 as a credit against his total tax. She reports and ex cludes her entire S40. She may not apply her unused allowance of $10 to her hus band's excess, even though they file a joint return. For persons with invest ments in certain regulated in vestment companies mainly mutual funds there is a new credit allowed this year in volving undistributed capital gains. You must file Form 2439, which your investment company will send you. It contains instructions on how to fill it out. U. S. Savings Bonds If you report ypur income on the cash basis you do not have to pay tax on the inter est until you receive it. In the case of E Bonds, that is not until you cash them in. Then you list the interest with the rest of your income and pay the tax due on the total. Note: On an E Bond, the interest is the difference between the purchase price and the value of the bond at the time of re demption, whether you hold the bond to full maturity or not. Retirement Pay and Annuities You owe no federal income tax at all, and need not re port, social security benefits, railroad retirement act pen sions, veterans pensions, ben efits to families of veterans, or payments for injury or sickness to military person- 52nd Year MEDFORD Price 10 Cents Tribune 2nd SECTION MEDFORD, OREGON, FRIDAY, FEBRUARY 21, 1958 Pages 1 to 6 Intelligent- Persons Choose When To Play Their Hunches By DELOS SMITH United Press Science Editor New York HP) Although you may want to argue about it, scientific experimentation has shown that more in telligent per sons choose when to play their hunches while less in telligent per sons play their hunches. Psy c h o 1 o g i sts Deios smith have been striving to understand the so called gambling "instinct." They have, found that people generally like to risk a loss in order to obtain a gain, even when they could have had the gain without risking the loss. They've also found that people generally are poor odds-figurers for their person al gambles. This has been snown by a number of ex' periments in which sizeable groups were asked to figure the probability of a person ally desirable thing happen ing. Used Statistical Rules These persons figured the probability was higher than it was actually when figured according to strict statistical rules, which explains why betting on long shots and trying to fill straights from the inside are popular pastimes. Now comes H. C. A. Dale, of the British Research Coun cil who undertook to find out what all this has to do with intelligence or lack of it. He gave to 40 persons the task of finding an object which might be in a number of places. There are two ways of going about such a task. You can go about it syste matically and move from pos sible place to possible place in some kind of orderly man ner, say, from left to right. This way you're certain to find the object although if your luck is bad, it will be in the very last of the places where it could have been. Or you can go about it on a hunch basis. This way you flit about at random. With luck, you find it quickly. Without luck, you may never find it because of the risk of forgetting where you've looked and ' of overlooking places where the object could be. Measured Intelligence Of Dale's 40 persons, 22 played the game the hunch way which, when you think about it, doesn't make much sense. Dale then measured the intelligence of these 22 by psychological testing, and found that they were less in White to Address Farm Loan Meeting Harold White, superintend ent of Southern Oregon Ex periment station, and E. C. Prestbye, attorney for the Federal Land Bank of Spo kane, will address the annual meeting of the Southern Ore gon National Farm Loan as sociation in Gold Hill Feb. 26. About 100 farmer and idiiuuer memDers or. tne as sociation from Jackson and Josephine counties are ex pected to attend, according to F. E. Bowman, secretary-treasurer. Registration will be at 11 a.m., with a free dinner at noon, followed by the busi ness session. The meeting will be held in the Gold Hill Grange hall and the. dinner will be served by Gold Hill Grange ladies. Entertainment will be provided by the Cra ter High school dance band. Bowman said association members will elect two direc tors for a three-year term. The terms of Andrew E. Stevens of Medford and Albert L. Straus of Gold Hill expire this year. The annual report on association activities will be made by Oliver H. Round tpee of Williams, vice-president of the association. Reserve Requirements Of Banks Reduced Washington OP) The government has released up to three billion new dollars that U. S. banks may pump into the nation's faltering economy. In its most sweeping anti recession action since aban doning the "tight money" policy, the Federal Reserve Board Wednesday cut the reserve requirements of its 6,400 member banks by $500 million. telligent than the 18 who had searched for the object syste matically. But rather than answering a question, this result asked one. Had superior intelligence permitted the 18 to figure out in advance that the laws of probability made the syste matic way more likely to be profitable than the hunch way? Dale found that the 18 actually were no better at figuring odds than were the hunch players. They, too, had had hunches, but they had chosen to put their hunches to one side. In short, they had hunch-control, and the less in telligent didn't. 27 Initiated Into Knights Twenty - seven members were initiated into the Knights of Columbus at ceremonies last Sunday. The third degree was conferred late that after noon. Joe McCormick of Portland conducted the third degree, assisted by a ritualistic team from Klamath Falls and aided by Otto K. Smith. New members initiated in cluded Thomas W. Dugan, Francis D. Harden, Donald C. Jackson, James E. Messer, Neal J. Murphy, Frank B. Pallo, Donald E. Prom, James A. Redden Jr., Martin Spiel bush, Dr. Mario J. Compagna, William F. Crowning Jr., Ed ward E. Ford, Theodore C. Holmes, William L. McKib bin, Robert Messer, James C. Murray, Dr. John Porto, John L. Raapke, Gerald J. Scan nell Jr., and Robert B. Sutton, all of Medford. Others were William H. Baum and John E. Walker, Central Point; Ernest H. Cooper, Gold Hill; and Mich ael J. Barrett, Raymond J. Salisbury, Paul Berg and Charles Snell, all of Grants Pass. About 100 attended mass at Sacred Heart Catholic church, which was followed by a breakfast in the church annex; More than 175 attend ed a banquet at the Rogue Valley Country club. 40 To Be Initialed Into Local Elks A class of 40 candidates will be initiated into the Med ford Elks club as part of the lodge's observance of the 90th anniversary of the Benevolent and Protective Orders of Elks. Initiation ceremonies are scheduled next week, Elks of ficials said. The Elks club was started in New York City, Feb. 16, 1868, when 15 actors, music ians, theatrical managers and others in show business or ganized a society for social purposes and to aid people in distress. Charles A. S. Vivian, a sing er, was leader of the group, which during the past 90 years has grown to a nation wide organization with more than a million members in 1,815 clubs. Among projects by the Elks are youth projects, including the annual Student Govern ment Day project sponsored in this area by the Medford Elks lodge. The program orig inated in Medford, and has received national recognition. Salem (IP) The Oregon Livestock and Poultry Feed ers association has' been formed here. Salem (Ifl The State Ag riculture Board meets here next Tuesday and Wednesday. nel disabled in active service Provisions for other kinds of retirement income are somewhat like those for divl dends; 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 contributions you made to wards a pension during the years you were working come back to you tax free. On the other hand, if your employer footed the bills, you are taxable forvthe payments as you receive them now. However, if you paid taxes on the contributions as he was making them to your pension fund, or if you paid part of the cost, you may now re ceive tax free the portion you paid in or paid taxes on. 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 in come, up to $240 per person. To be eligible for this cred it, you must have reached 65 by the end of 1957, unless you were a civilian employe of federal, state or local govern ment, or a member of the armed forces, and are receiv ing income under a public re tirement system. Retirement Income If you are 65 or older, re tirement income, for the pur pose of computing your tax credit, includes pensions, an nuities, interest, 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 re ceive under a public retire ment system. In neither case does retirement income in clude money you are now earning, and it may be neces sary to deduct part of your current earnings in figuring out your retirement credit. One further qualification: You (or your deceased hus band or wife) must have earn ed more than $600 in each of 10 years prior to 1957. The 10 years do not have to have iiitiiiiiiiiiiuiiiiiuiiiiiiiiiiummmiiiiiiiuiiiiiiiiiiiiimiiiuuHiiiiiiiiiii TfflE FF OR COLTEJMiBEA. 01 K3EC033,!OS ABUEOTIBES 1 Sill! iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiffiiiHiutiiiiiiiiiiiiiiiiiftimfiitiifiiiiitiitiiiiiiii 1 58 Ford prices are below 57 prices on some popular models. For example..; r. AH 111 V ilflinnlD c Before you buy any car Ul V lOODr Plee call for a Ford test ride Crater Lake Motors MAIN & FIR MEDFORD 7 This Big 58 FORD Family Sedan jrioe mer very eeeordlng to individual dealer's prioing polietee Custom 300 Tudor Sedan with Mileage-Maker Six Engine; two-tone pesinf de luxe interior at no extra cost NEW FACES SORCERY!: Saba end his per- ' CARIBBEE: Songs of the Indira cuuion eosemoie. wl 101 Jun Serrano eno ins Ceno feeaa Combo. WL 103 tmniiiiimtnttiiiiitniiiiuiiniiiftiijitifiiiiitiifinfriuiiiitiitiiiiiiiiifftifii NEW PLACES 'FROM THE LAND OF THE EL RODEO: (Rodeo Songs of COLDEN FLEECE: Th Greek Chile) Los Chilenos with r. folk Dances and Songs Society, taro Gatic and Hilda Sour. ' WL 123 , WL104 unnimmiiiiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiriiMiiiiiiiuiiiiiiiiiiiiiitnii : I i in 2T MUSIC FROM THE- FILMS; Michel Legrand and bis orches tra. WLIO NEW SOUNDS - . CABALLERO: Songs of Old Mexico Jm Manual. WL 102 SJgeach COLUMBIA H RECORDS A NVrSKJII Of CBS e -CtoM- (g) op MaKUfef. BTja.M erica are atfesMtfllst, NOBODY OUT-TRADES A FORD DEALER Books Gifts Records 217 E. Main, Medford uuimiinmimiitiuuiiiMiuumw been consecutive. Before I close this series and I hope it has been helpful to you here are several points worth repeating: File your return as early as you can. The deadline is mid night, April 15. Be sure you have figured your tax correctly and have looked into all the rules which may apply to you and may give you a lower tax. Our job is to collect every cent of tax which is owed, but no more. Late filing or errors can make it necessary to charge you interest or penalties. If you need more assist ance, consult your - Internal Revenue Service. Sudan To Take Case To Security Council : Khartoum (IP) Th Su dan, abandoning hope that its border dispute with Egypt could be settled by local n gotiation has decided to take its case to the UN Seeurity council. 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