Now Withheld from Each Paycheck
WASHINGTON, D.C.—Effective today, income tax will no longer be collected as a lump-sum payment at the end of the fiscal year as it has been for the thirty years since the tax was enacted. Instead, individuals will have twenty per cent withheld from each paycheck beginning with the pay period starting July 4. The twenty per cent levy applies to any income above a person’s exemption, which is $624 for a single person and $1,248 for a married person with an additional $312 for each dependant. Estimates by the Treasury Department project approximately five hundred million dollars will be collected in tax each month. This rule change affects approximately forty-four million workers and comes after a four-month congressional battle. Those professions still to make a year-end, lump-sum payment are farm laborers, domestic servants, ministers, and members of the armed forces.