468 EXTENSIONS OF REMARKS January 28, 1982 EXTENSIONS OF REMARKS PROTECTING SENIOR CITIZENS You must file ·. a return Income was at least: ity, or Sick Pay Recipient's Request for Fed­ tor 1981, even if you eral Income Tax Withholding," and give it AGAINST INFLATION owe no tax: to the payer of your pension or annuity. 5. If you received any advance earned income credit <EIC> pay­ TAX TABLE AND EXEMPTIONS ments from your employer<s> Tax table HON. DON RITTER during 1981. 6. If you were self-employed and The tax table has been developed to make . OF PENNSYLVANIA your net earnings from this work it easier for you to find your tax if your tax­ IN THE HOUSE OF REPRESENTATIVES were at least $400, you must file able income <line 12, Form 1040A; line 34, a return to pay self-employment Form 1040) is less than $50,000. You must use this table unless you compute your tax Thursday, January 28, 1982 tax. You are self-employed if you carry on a trade or business as a using Form 4726 <maximum tax>, Schedule sole proprietor, a member of a D <alternative tax), or Schedule G <income e Mr. RITTER. Mr. Speaker, the rav­ partnership, an independent con­ averaging). In those cases, you must use the ages pf inflation have hit us all, but tractor, or are otherwise in busi­ tax rate schedules. The tax table is designed none more than our senior citizens. ness for yourself. This includes to be used by individuals <other than those Because our older citizens are, for the certain part-time work that you cases above) whether or not they itemize most part, on fixed incomes, it is im­ do at home or in addition to your their deductions. This is possible because of portant they take advantage of all al­ regular job. This rule applies re­ an adjustment made on the Schedule A and gardless of your age; whether or an amount built into the tax table known as lowable tax deductions, exemptions, not you are receiving social secu­ the "zero bracket amount." This flat and credits. · rity benefits; and even if you are amount based on your filing status provides For this reason, I am submitting for otherwise not required to file a a minimum deduction for all individuals. If the RECORD a revised checklist of item­ Federal tax return. you are married filing jointly or a qualifying 7. If income tax was withheld from widow or widower, your zero bracket ized deductions for use in preparing your pay, you should file a amount is $3,400. If you are single or a head Federal income taxes prepared by the return so that you can get a of household, your zero bracket amount is Senate Select Committee on Aging. refund of the tax withheld, even $2,300. If you are married filing separately This checklist also highlights the if you are not required to file a it is $1,700. , changes in the tax code as a result of return. Exemptions the Economic Recovery Tax Act of ESTIMATED TAX PAYMENTS You are allowed a $1,000 deduction for 1981. Many newly retired people do not realize each exemption shown on your tax return I hope our senior citizens will find that they are often required to make esti­ <line 6, Form 1040A; line 6e, Form 1040). mated tax payments. You and your spouse are allowed an addi­ this information useful in preparing The pay-as-you-go feature of the Federal their 1981 Federal income tax returns. tional $1,000 exemption if either or both of · income tax system requires your employer you are age 65 or older on the last day of Form 1040 checklist is as follows: to withhold income tax on compensation the tax year. such as salaries, wages, and tips. PROTECTING OLDER AMERICANS AGAINST The same feature applies to your income In addition, you or your spouse may be OVERPAYMENT OF INCOME TAXES that is not subject to withholding, or able to claim a $1,000 exemption for blind­ [A revised checklist of itemized deductions income from which not enough tax is being ness <refer to your tax instruction booklet for use in taxable year 19811 withheld. This includes income from self­ for more details on this exemption>. Age employment, alimony, pensions, annuities, and blindness are determined on the last Who must file a Federal tax return is gener­ interest, dividends, rents, capital gains, and day of your tax year. This is December 31 ally determined by your income and your other income from which Federal income for most taxpayers. You are considered age filing status tax is not withheld. For these items of 65 on the day before your 65th birthday. if You must file a return Income was at least: income you must file a declaration of esti­ Thus, your 65th birthday was on January tor 1981, even if you mated tax, Form 1040-ES, and pay the 1, 1982, you can take the extra exemption owe no tax: income tax and any self-employment taxes­ for age for 1981. The $1,000 exemption is 1. If you were siligle, divorced, or timated to be due. claimed on line 33, Form 1040 and on line married with a dependent child Your estimated tax is the total of your ex­ 11, Form 1040A. and living apart from your pected income tax and self-employment tax MULTIPLE SUPPORT AGREEMENTS spouse for all of 1981 and were: minus your expected withholding and cred­ In general, a person may be claimed as a Under age 65 ................................. $3,300 its. Form 1040-ES provides a worksheet for making this computation. dependent of another taxpayer, provided Age 65 or over............................... $4,300 If your estimated tax for 1982 is $200 or five tests are met: (1) Support, <2> gross 2. ·u you were married filing a joint more and your estimated gross income not· income, <3> member of household or rela­ return and were living with your subject to withholding includes more than tionship, <4> citizenship, and (5) separate spouse at the end of 1981 or on $500 of taxable income, you must file Form return. the date your spouse died and: 1040-ES. Installment payments are . due The support requirement is that the Both were under age 65 .............. $5,400 quarterly: April 15, June 15, September 15, person claiming the exemption must have One was age 65 or over............... $6,400 and January 15. contributed more than one-half of the indi­ vidual's total living expenses. But in some Both were 65 or over ................... $7,400 You may be charged a penalty if you do not pay enough estimated tax. However, the cases two or more individuals provide sup­ 3. If you were married filing a sepa­ penalty will ~ot apply if you make each pay­ port for an individual, and no one has con­ rate return or married but you did ment on time and: tributed more than half the person's sup­ not share the same household at <1> The payment is at least 80 percent of port. However, it still may be possible for the end of 1981 ................................... $1,000 the amount of estimated tax due based on one of the individuals to be entitled to a 4. If you were a qualifying widow<er> the tax shown on your return, or $1,000 dependency exemption if all of the with a dependent child and: <2> The payment is based on one of four following requirements for multiple support Under age 65 ................................. $4,400 exceptions shown on Form 2210, Underpay­ are met: Age 65 or over ............................... $5,400 ment of Estimated Tax by Individuals. (1) Two or more persons-any one of In order to avoid a penalty or paying esti­ whom could claim the person as a depend­ mated tax, you may have income tax with­ ent if it were not for the support test-to­ held from your pension or annuity. You gether contribute more than half of the de­ must fill out Form W-4P, "Pension, Annu- pendent's support. e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. January 28, 1982 EXTENSIONS OF REMARKS 469 <2> Any one of those who individually con­ chologists, physical therapists, acupunctur­ charge was for investigation fees, member­ tribute more than 10 percent of the mutual ists, Christian Science practitioners, and ship fees, loan fees, service charge, or simi­ dependent's support, but only one of them, psychoanalysts. lar charges. may claim the dependency deduction. Medical examination, X-rays and labora­ Points.-When buying a residence, (3) Each of the others must file a written tory services, insulin treatments, and whirl­ "points" are interest paid in advance. You statement that he or she will not claim the pool baths the doctor orders. may deduct the amount you pay as points in dependency exemption for that year. The Nursing help. However, if you pay some­ the year of the payment-if the loan is used statement must be filed with the income tax one to do both nursing and housework, you to buy or improve your principal residence return of the person who claims the depend­ can deduct only the cost of the nursing and is secured by that residence. In addi­ ency exemption. Form 2120 <Multiple Sup­ help. · tion, the payment of points must be an es­ port Declaration> may be used for this pur­ Hospital care <including meals and lodg­ tablished business practice in the area pose.