The Key West Citizen Newspaper, August 16, 1954, Page 5

More Workers Eligible For Tax Exemption On Sick Pay By CHARLES F. BARRETT WASHINGTON # — Many mi- lions of additional workers are now eligible for tax-exemption on ‘wages received while they are sick. And more liberal rules have hove for taxing the employe picwenl or accident benefits, death benefits, and lump-sum payments under pension, profit or stock- sharing plans. All these rules are spelled out in the huge tax revision act_re- cently passed by Congress. They apply to such employe benefits Te- ceived after last Dec. 31, if they are financed by employers under ‘any systematic plan. If you are covered by such a plan, perhaps the most important thing to remember is this: : Wf your pay is continued while you are off work because of sick- ness or injury, you pay no tax on wages of up to $100 a week after the first seven days of the sick- ness @ injury. Further, you Pay mo tax on ‘wages up to $100 during the first seven days if your absence is due “Snake Pit” To Have Encore Showing Wed. In making a motion picture from Mary Jane Ward’s best-selling novel, ‘“‘The Snake Pit,” Produc- tion Chief Darryl] F. Zanuck ignor- ed existing taboos by tackling a subject that previous to the Twen- tieth Century-Fox encore triumph, was only discussed in whispers. In the film which stars Olivia de Hav- illand at the Strand Theatre on Wednesday only, he has put over his point simply by presenting a great and powerful story with forceful and dramatic realism. As the millions who have read the book know, the story traces through a series of carefully con- trived flashbacks the insidious forces that lead to the mental breakdown of an intelligent, sen- sitive woman, played in the pic- ture by Miss de Havilland. In casting the picture, which was directed by Anatole Litvak, there was no hesitation about assigning the leading role to Olivia de Hav- to accidental injury, or if you are hospitalized at any time during an illness, Thus, for example if you make $100 a week or more and you are out three weeks with an injury or hospital illness, you can deduct $300 from your taxable income. Even at the minimum 20 per cent tax rate, that would be a tax saving of $60 for you. lf you are sick but don’t go to a hospital, your wages for two of the three weeks still would be tax-free, a tax cut of at least $40. Here are other important béne- fits: You pay no tax on payments which reimburse you for actual medical expenses paid by you or your dependents. Like sick leave wages, these payments simply are not counted as income. Similarly you pay no tax on pay- ments to you for the loss of limb or other part of the body, or for disfigurement. Under the old tax law some em- ployes got these tax-free and some didn’t. Generally, if RANGER RETRIEVES TRUCK REMNANT LOS ANGELES (#—“I'll bring back anything that’s salvageable,” a forest ranger promised Donald L. Colundan after Colundan’s new 1954 pickup truck slipped from a jack and rolled over a precipice. Some time later the ranger climbed back out of the canyon to where Colundan was waiting on Angeles Crest Highway. The truck had rolled 1,500 feet down, he said, handing Colundan one hub cap, badly battered. illand. She was eager to appear in the film, fully aware that it would give her the greatest dramatic op- portunity of her reer. Mark Stevens, who is also starred with Leo Genn, enacts the role of her husband. Genn is seen as the sym- pathetic doctor who literally saves Miss de Havilland from losing her sanity. “The Snake Pit” cast reads like a Who’s Who of the entertainment world with such names as Celeste Holm, Helen Craig, Leif Erickson, Beulah Bondi, Lee Patrick, How- ard Freeman, Natalie Schafer, Ruth Donnelly and scores of other top flight Hollywood and Broad- way actors. NEED MONEYS “THREE HOTELS IN MIAMI at POPULAR PRICES Located In the Heart of the City REASONABLE RATES ROOMS WRITE or WIRE for RESERVATIONS with BATH and TELEPHONE Ritz HOTEL 182 E. Flagier St. 102 Rooms Elevater Solarium Pershing HOTEL 226 N.E. 100 Rooms Elevator Heated Miller HOTEL Ist Ave. 229 N.E. Ist Ave. 86 Rooms Elevator 3 BLOCKS FROM UNION BUS STATION Overseas Transportation Company, Inc. Fast, Dependable Freight and Express Serviee between MIAMI and KEY WEST Also Serving ALL POINTS ON FLORIDA KEYS Between Miami and Key West Express Schedule (No Stops En Reute) LEAVES KEY WEST DAILY (EXCEPT your employer had a commercial insurance contract to cover his sick_and. accident benefits, they were tax-exempt. But if the em- Ployer financed them himself — as many do, especially for sick leave pay — the benefits were fully taxable, ue law ey out what its crimination. os There is no limit on the sick- pay exemption. If you are out for six months, for example, you could get up to $2,600 in tax-free wages and save at least $520 in taxes. If an employe pays part of the cost of a sick or accident benefit plan, he pays no tax on the bene- fits for which he pays. The rules above would apply to that part of benefits financed by his employer. The new act takes a similar step toward death benefits. Payments of up to $5,000 to beneficiaries could be tax exempt uncer the old law — but only if the employer was bound by contract to pay the benefit. The new act grants the exemption whether the benefit is paid under contract or not. The new act also extends the $5,000 exemption to lump-sum death payments under qualified Pension, profit-sharing or stock- bonus plans. Under the old law, such payments were not exempt if the employe while living had a benefit right which could not be forfeited to anyone else. One “ld provision is tightened, Tender Krusi Monday, August 16, 1954 THE KEY WEST CITIZEN Page § however. Any one employe is en: titled to only one $5,000 death ben- efit exemption. In the past, a man working fer several firms could the employer bought a commer- cial insurance contract to cover them. If the employer financed the plan through. a trust fund, the ben- get a $5,000 tax-free benefit from | efits were taxed at the capital gain each firm. There is one more change a- fecting benefits paid because of separation.from service under pen- sion, profit-sharing or stock bonus plans. Under the old law, lump- sum payments under these plans were taxed as ordinary income if BREAD «=~ 12c Sunshine Sweets SUGAR 5 «39 Lykes Sugar Creek PICNIC HAMS . Baby BEEF SHORT Table Ready OLEO 2: 49¢ RIBS = Mahatma Fancy Long Grain RICE Sum 5% Diamond TOWELS 2 « 29¢ Diamond WAX Sealtest -- Sally TALL Southern 39 39% California Fancy Bartlett PEARS rate, The new law extends the cap- ital gain rate even to insured plans. Under the old law, if you died after retirement, the lump-sum payoff to your beneficiaries was always taxed as ordinary income. Now this lump-sum payment can be taxed as a capital gain, | geevecccsccssccceocces, ~é '° ot COR eee eercanessensenat 2 29¢ Fancy No. 1 Large Elberta ARMOUR’S MILK 29 PREMIER Light Meat PEACHES Hard Heads Green CABBAGE Fancy Worm Free Golden CORN OCOMA Chicken Fricassee 15%-Oz. 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