Monday, December 05, 2016

Monday Memories--Tax year 1962

American taxpayers can claim a Child Tax Credit (federal) of up to $1,000 for each child under age 17. The credit is reduced by 5 percent of adjusted gross income over $75,000 for single parents and over $110,000 for married couples. In 1962 the personal deduction, which included yourself, your children, steps, cousins, blind grandmother (if you supported them) was $600. Using an inflation calculator, that would be $4,730.50 today. I down loaded the 1962 instructions to check. It was only 4 pages.

In 1962, if you had income over $200,000, (about $3.5 million today) that portion was taxed at 91%. Although, based on what I've read, almost no one paid that because of various ways to shelter income. When top marginal rates were lowered by JFK and Reagan, the government actually got more money.

I remember my uncle "Gramps" Miller helping me itemize that year. We had purchased a duplex in the fall of 1962 and he showed me how to itemize every little thing that went toward the rental half of the house, and also the miracle of double depreciation. I learned then, that although owning a home residence was money poured down a hole, if you bought income property, it could pay for itself.  In fact, if we hadn't bought that run down duplex in a shabby neighborhood, we wouldn't be where we are today.

40 years after we bought 108 E. White St., it had deteriorate badly   

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