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About Herald and news. (Klamath Falls, Or.) 1942-current | View Entire Issue (Oct. 28, 1957)
MONDAY, OCTOBER 28, 1957 HERALD AND NEWS. KLAMATH FALLS, OREGON PAGE FIVE Income Tax Tips Editor's Note: This is the first In a series of four articles on federal income taxes. The articles are based on information provided by the American Institute of Cer tified Public Accountants and the Oregon Society of Certified Public Accountants. You still have time but not much time to do a little year-end tax planning and assure yourself of the best possible bioak when you file your tax return next April. Millions of high, low and mid dle income taxpayers, realizing that careful planning of their fi nancial affairs between now and the first of the year can pay off handsomely when the tax collec tor calls next spring, have al ready begun to establish those extra deductions and special ex emptions that will reduce their tax bills. To alert you to the tax-saving steps you may be able to take before the end of the year, this newspaper is printing a series of articles prepared with the help of the national and state organiza tions of certified public account ants. These articles if you keep them and follow their advice may save you money. And re member that a tax penny saved is more than a regular penny Lions To Push Project Providing glasses for underpriv ileged children is the annual proj ect of the Klamath Falls Lions Auxiliary. To raise money for this project, committee members, plan ning a rummage sale, met a', the home of Mrs. Estin Kiger for a coffee hour October 24. Many ex ceptionally good items have been collected. The sale will be held in the building formerly occupied by Garcelon's on November 1 and 2. The door will open at 7 a.m. on Friday. During the coffee hour. Mrs. Vera Moore conducted a refresher course in operating the telebinocu lar machine. For several years the Lions auxiliary under the guidance of local eye doctors, has examined the eyes of Klamath Union High School and Sacred Heart freshmen. These students are examined with the use of the telebinocular at the beginning of the school year. earned, because you don't have to pay tax on it. Many taxpayers have eood and bad income years, depending on the success or failure of personal investments and business condi tions in general. While this can not always be avoided, the effect! should be anticipated. Sound year end tax planning requires that you know fairly well what your in come prospects will be for 1957 and 1958. If you are like most individual taxpayers, your goal at this time should be to level out income for this year and next year. Needless or careless bunching of income in either year can be costly. The sharp bite of today's progressive tax rates which you can assume will be as high or possibly only slightly less in 1958 makes it much belter to have an income I of $3,000 in each of two years. I rather than SG.OOO in one and $10. i 000 in the other. Taxpayers who are in danger of being whiplashed from one tax 1 bracket to another because of wide I fluctuations in their 1957 and 1958 income should act before Decem ber 31 to try to average out their taxable earnings. This can be done by careful shifting of income and deductions from one year to the next. If your two-year income esti mate shows that your income for this year will be significantly higher than next year's, you should take immediate steps to throw as much income as pos sible from 1957 to 1958. At the same time you should speed-up the payment of all expenses that can be deducted on your 1957 re turn. By concentrating deductions in the higher year and switching income to the lower, you will keep your taxes for both years in the lowest possible tax bracket. Should you be facad with the more desirable problem of a siz able increase in your 1958 in come, reverse this procedure de lay expenses and speed-up income if you can. Timing income and deductions to gain a tax advantage is not too difficult for the millions of tax payers who file returns on the basis of cash receipts and cash disbursements. Since their earn ings are taxable only after pay ment is received, "cash basis" business and professional men can shift income by simply delaying or speeding-up the collection of accounts receivable near the end of the year. Salesmen and con tractors can do the same thing by extending or closing deals that may be pending in November or December. Farmers who operate on a cash basis can accelerate or postpone income by proper timing of the sales of their crops or livestock. While their income will be taxable in the year cash is received, the full costs of raising crops or cat tle are deductible for the year in which the costs were paid. One look at an Internal Revenue Service table of tax rates will GETTING AROUND OTTAWA Uft Turnabout is fair play, they say. Tongue Gurcan, 30-year-old Turkish Tourist Bu reau official, has decided to play tourist himself. He and his wife are holidaying in Ottawa. MJB COFFEE 1 lb. 89c 2 1b. 1.77 Everyday Low Price BUY LOW FOOD CENTER 1338 Ore. Ave. y prove the hard dollar and cents advantages of a few" year-end in come shifts. The taxpayer who ex pects his income to drop, from the : 40 per cent bracket this year to a 30 per cent DracKet in iso, can save $100 for every $1,000 of in come he manages to put off until after January 1. There are special situations in which it can be advantageous to I bunch income in a single tax year. For example, a husband and wife lean file a joint return to gain the 'benefits of income splitting. ! Should one of them die, the sur Ivivor may file a joint return for ithe year in which the spouse jdied and also for two succeeding years under certain conditions. Thus, a widow or widower may profit by throwing more income into this year and less into next I if his or her spouse died in 1955, since the Drivilpop rr filina n ; joint return will be lest in" all cases in ltios. I you are Dlanninp In ho m.-ir. ried in 1958. remember that the income - splitting privileges vou gain will act like a rate cut 'for you. At $7,000 of income, your taxes will be $240 less than if vou were single, assuming that you take the St.ind.irH ritwlltrtinn onrt claim only exemptions for you and your wife. For this reason, young I however, is that In the future you couples planning marriage might will have to go on reporting in consider postponing income fromlterest as it accrues, rather than 1957 to 1958, while accelerating de ductions from 1958 to 1957. A final suggestion to holders of U.S. Savings and War Bonds: if you are trying to accelerate in come on your 1957 tax return, you might consider reporting the interest that has acrrued on your bonds. A point to keep in mind, in the years the bonds mature. Next Article: How to Plan Your Federal Income Tax Deductions. O Newspaper SPOT ADS are inexpensive repealed daily 88c TV SERVICE W accept calls Man. thru Sat. 9 a.m. to 8 p.m. BARABOO'S Motorola - TV - Hi-Fi . Rodio 333 East Main Ph. TU 4-4616 if hi in i 1 ? i?S c IS. 9 nig once in a century has so fine a bourbon been produced K LIGHTER. .. 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