o
Income Tax Payable on Money Earned by interest, Dividends Above S50
Kditnr's note: Thli Is thi last nf
five dispatches on how to prepare
your income lax tn the most eco
nomical mailer. Todav's dispatch
covers payments and allowable de
ductions on interest, dividends, sick
pay and taxes.
By EDWARD COWAN
Washington - ll'PIl - You
must pay income taxes not
only on the money you earn
but also on the money your
money earns.
That means that all the in
terest you received last year,
and dividends above $50, are
taxable.
Interest is taxable even if
you only had it credited to
a thrift account and did not
take it in cash. Interest on
a loan is taxable even if the
principle itself was not paid
back to you. (There are, how
ever, provisions for taking bad
debt deductions.)
Dividends, although taxa
ble, come in for special treat
ment in two ways:
-The first $50 you received
in 1960 is not taxable.
-Generally you may lake
a credit against your tax of
4 per cent of dividends above
$50.
Suppose, for example, a tax
payer received S30 in divi-1 savings banks and similar in-
dends in 1960. He reports this stitutions. These "dividends"
on his return but does not! are actually taxable interest.
include it in his taxable in
come because it is less than
$50.
Another taxpayer received
Dividends on life insurance
policies are not considered in
come for tax purposes.
U. S. Savings Bonds - Hold-
$85 in dividends on his stock, ers of these bonds need not
He reports that but pays tax report the interest they re
only on $35. He may also take ceive each year. They may
4 per cent of the $35 ($1.40)
as a credit against his tax.
One Exclusion
In a joint return, a husband
and wife may not combine
their $50 exclusions. Each
may take one exclusion sep
arately. Suppose he received
$70 of dividends and she re
ceived $20 and takes a tax
credit of 80 cents (4 per cent
of $20). Her $20 of dividends
also is reported on the re
turn. It is not taxable. Her
unused allowance of $30 is
not applicable to the hus
band's dividends.
These rules apply to divi
dends paid on the common
and preferred stocks of fully
taxable U. S. corporations.
They do hot apply to the so
called "dividends" of savings
and loan associations, mutual
defer reporting this income
until the bonds are cashed.
On Series E Savings Bonds
the interest is the difference
between the purchase price
and the bond's present cash
value.
Must Stick to It
A taxpayer also may elect
to report the interest each
year instead of waiting until
he cashes his bonds. If he
chooses yearly reporting he
must slick to it, even for
bonds he acquires in the fu
ture. To change to deferred
reporting he must first get
permission from the revenue
service.
Sick Pay - You may deduct
up to $100 a week of sick pay
under certain conditions.
If you were sick at home
for more than seven consecu
tive days, the pay you re
ceived starting with the eighth
day may be excluded from;
your income. You may deduct !
one-fifth of your weekly pay'
tout not more than $20) fori
each day missed if you are on j
a five-day week: one-sixth i
(but not more than Slti.(iT) if
your work a six-day week, j
You may deduct sick pay
starting with the first day if!
you are away froi the job
because of injury, no matter!
where suffered, or if your ill
ness caused you to be a hos-l
pital patient for at least one
day.' Again, you may not de
duct more than $100 a week.
Must Attach Form
If you claim sick pay de
ductions. beQ sure to attach
Form 2440 to your return to
support the claim. This form
can be obtained at your near
est Internal Revenue service
office.
Retirement Income - There
are several special rules gov
erning taxation of retirement
income. If you received retire
ment income in 19ti0 and have
any doubt about how to treat
it on your tax return, consult
your tax adviser or the Inter
nal Revenue service.
Retirement income which is
not taxable and need not be
reported includes Social Se
curity payments, Railroad Re
tirement act pensions, veter
ans pensions, benefits to fam
ilies of veterans, or payments
for injury or sickness to mili
tary personnel disabled in ac
tive service.
Whether other retirement
income is taxable, and how
m u c h, depends on several
things, especially whether you
or your employer or both of
you made contributions to the
pension fund and whether tax
es were paid.
There also are provisions
for special retirement income
credits.
Persons 65 or older should
remember that by virtue of
their age they are entitled to
two $600 exemptions, or a to
tal of $1,200. (See dispatch Ilitirement income does not in
of this series.) elude money you are now
Regardless of your age, re-1 earning by work.
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Medford
Tribune
SECTION B MEDFORD, OREGON, MONDAY, FEBRUARY 6. 1961 PAGES 1 to 8
V j' UMt
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"WW
A HAPPY FAMILY - The Shah of Iran and levi, right, are a happy family. The Shah
his commoner wife, Farah Dibah, shown at had waited 20 years for this heir to the
left, and their son, Crown Prince Reza Pah- Peacock throne. (UP1 Telcphoto)
Shah of Iran Radiantly Happy
As Son's 'Future Plans Made
Tehran IUP1I The proud
handsome man and his beau
tiful young wife stand hand-in-hand,
peering down at the
sleeping infant. They look at
each other and smile, then
steal silently from the room.
The Shah of Iran has waited
20 years for this. He lives it
every second of his waking
hours.
The 2,500-year-old peacock
throne at last has an heir.
With the birth Oct. 31 of
Crown Prince Reza Pahlcvi of
Iran, the gloom that has hung
heavily on the handsome ruler
of this ancient kingdom has
vanished.
The Shah, his commoner
wife, former student Farah
Dibah, and their baby son are
a happy family. The palace
radiates with love. As one
courtier said: "There's a con-
Volunteer Observers Are
Listed in Bureau's Book
A Jackson family and three
southern Oregon residents are
among those cooperative wea
ther observers who receive
special mention in a booklet
dedicated recently to these
volunteers by the U.S. Weath
er Bureau.
The observers record the
high and low temperatures
each day, the 2 4 - h o u r 1 y
amounts of rain and snow and
several other weather ele
ments for the community in
which they live. This 365 day I
a year public service is car
ried on without compensation
in any form, it was pointed
out.
The booklet is divided into
two chapters. The first con
tains a brief resume of the
cooperative observer program.
The second deals with the ac
complishments of several of
the outstanding observers in
each slate. In Oregon there
are about 300 of these co
operative observers.
Special Mention
Two families and 11 indi
viduals have received special
mention in the booklet.
Among these are the Britt
family it Jacksonville, H. B.
Howell with 35 years of com
bined service at Grants Pass
and the Astor experiment sta
tion; J. Ludo Grieve, Prospect,
and Mrs. Christine B. Harr,
Copper.
Grieve retired in 1960 after
serving more than 35 years
at Prospect. He became the
Prospect observer in Novem-
if.
ber, 1925. From that time for
ward the weather records
have been outstanding in their
completeness, legibility and
accuracy, the booklet stated.
The California Oregon
Power company Prospect in
stallation, of which Grieve
was superintendent, included
four separate plants.
Rainfall Reports
Besides the monthly clima
tological reports forwarded to
the Weather Records Process
ing center each month, he pro
vides the Medford weather
bureau river district office
with reports whenever heavy
rainfall occurs that would be
a threat to life or property
through flooding along the
Rogue river and tributaries.
Grieve has also kept care
ful climatological summaries
of the Prospect weather for
the operating use of his company.
Salem Resident
Is Traffic Victim
Salem - OIPIl - John W. Un
ruh, 74, Salem, was killed in
stantly near here Friday after
apparently stepping in front
of a moving car. State police
said the accident occurred on
Liberty road near the south
city limits.
Ernest Kent Lindon, 19, Sa
lem, driver of the car, was not
cited. It was Oregon's 37th
traffic fatality of the year and
third for the month of February.
slant sparkle in the eyes of
both the shah and the queen."
Now that the initiul excite
ment' has tempered down,
people are looking ahead.
Their natural question is:
What do the Shah and Farah
plan for the fulure ruler of
Iran?
Recently the queen said her
child would be trained and
educated mainly in his home.
This, she indicated, would en
able him to grow up among
his own people and know
their needs.
He would go abroad only t
for his university education, I
possibly Switzerland, where
the Shah himself studied.
But already the palace is
going ahead with its prcpara-1
tions. A team of top local edu-;
calors is being assembled. It 1
is said little Reza will have I
Iranian tutors as well as
Swiss and British.
The shah, sportsminded and j
physically f i t himself, wants j
his son to grow up to be a
strong and healthy young
man, interested in sports. So
he has picked his own team
of physical, culturists for the
job.
Meanwhile, the baby prince
lives his days in a palace
within a palace not 50 yards
from his royal parents' private
suite.
Special Clothes
Over him watches attractive
French nurse Jeanne Guyon.
Late evenings and early
mornings, Miss Guyon wraps
the baby in special swaddling
clothes and carries him to the
queen for his three-hourly
feedings.
There's a special telephone
link between the nursery and
Farah's room. If the baby
cries too insistently, Farah is
at his side in a matter of
minutes.
The warmth of the family
group is seen every day.
When the palace clocks chime
one p.m., the proud father and
his wife go hand-in-hand to
the nursery.
"How's our son?" the Shah
invariably asks.
Pride glints in the dark
eyes of the Shah these days.
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