New law proposed
5
Profs may get tax help
State university faculty members would have the option of postponing until retirement the payment of federal taxes on as much as 12.5 per cent of their income under a Docking administration bill introduced in the Kansas Senate Monday.
By DON WALKER
This increase in the present tax-sheltered annuity of five per cent, coupled with the state's contribution of five per ment, would raise the amount of a faculty member's deferable income to the federal maximum of 17.5 per cent.
Have we lost you? Relax and read the oversimplification.
At present, the state automatically withholds five per cent of a faculty member's income for a retirement fund which is handled by the Teachers' Insurance and Annuity 'Association (TIAA). This amount is not taxed until retirement when he will probably be in a lower income bracket and paying a smaller tax.
Thus, a professor earning $10,000 receives $9,500 before taxes and has $500 stashed ay for retirement. For the time being, the Internal Revenue Service (IRS) is interested only in his $9,500. The professor will account for the $500 later at a lower rate.
This five per cent is called a "tax shelter."
Under existing state law, a
Lecture, 3 p.m. Dr. Martin Nierem-
her, Germany. Methodist Student
TODAY
Official Bulletin
Psychology Colloquium, 4 p.m. Dr.
Joseph Lyons, KU, Forum Room.
SIA Travel Forum, 4:30 p.m. dr.
Felix Reiss, SE Asia,
awt. Room, Union
Alpha Chi Sigma Pledge Banquet,
6:30 UNION
Classical Film, 7 & 9 p.m. "The Virgin Spring," Swedbank, Dyche Acad. Little Symphony Concert, 8 p.m. Swanthorpe Residential Hall
Lecture, 8 p.m. Gunnar Henningsmith, Norway Oslo; biology & psychology (10 hours) 1942 UTDA
Experimental Theatre, 8 p.m. "Oh,
What A Lovely War!"
eral government's standard by increasing the optional tax shelter from 5 per cent to 12.5 per cent.
TOMORROW
faculty member has the option of up to an additional five per cent tax shelter. The $10,000-a-year professor, then, can put as much as $1,000 in the retirement fund, pay his current tax rate on $9,000 and defer payment on the $1,000 until better—that is, lower tax-rate—days.
Sophomore Congress Meeting, 7.30
n.a., Forum, Boom, Union
Optional 12.5 per cent plus automatic five per ment equals 17.5 per cent.
Indoor Track, 7:30 p.m. Oklahoma
State, Allen Field House.
Daily Kansan
Wednesday, February 22, 1967
The IRS allows up to 17.5 per cent to be "sheltered" in this manner, 7.5 per cent more than Kansas' maximum. The new bill, then, will enable a faculty member to take advantage of the fed-
Experimental Theatre, 5:20 p.m.
"Oh, What A Lovely War."
Tax payments on the amount in a teacher's retirement fund, the sheltered amount, are made at his tax rate at retirement.
The bill received support from Chancellor W. Clarke Wescoe when he met with the House and Senate Ways and Means committees last week.
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