1942 Tax Returns

Many of us already have, or are working on completing their tax returns.  I recently discovered my maternal grandparents' 1942 Tax Returns. (They filed separately, likely because my grandfather was overseas.) I found them interesting.  Here are two clippings. 

1) It's nice to have further confirmation that my grandmother worked for the Post Office during the war.  Her "Official Personnel Folder" (OPF), ends in 1937, when she resigned after marrying my grandfather.  I checked to see if a second OPF had been created under her married name, but none was found.  My mother knew that she had worked during the war.  I also have a copy of the resignation letter she submitted to the Inspector-in-Charge in 1944. 

2) It's possible to compare relative dollar amounts at MeasuringWorth.com.  My grandmother's earnings in 2009 would have been worth $19,600 on the Consumer Price Index.  The "Value of the Consumer Bundle" would be $37,200.  These are the two indexes the site recommends for comparing wages.   I know she started working in May (see letter excerpt below), so this is only for 8 months of work at most.

My grandfather's earnings would be $50,500 on the CPI and $96,600 on the consumer bundle.

3) I wondered what I would find if I compared my Grandfather's earnings to current military wages.  There turns out to be too many unknown variables.

I looked up current salary ranges for active military.  My grandfather spent (approximately) five months of 1942 as a Captain, and six as a Major.  Today, depending upon years in service, he would make between $38,089 (less than 2 years) to $57,267 (10 yrs).  However, while my grandfather would have been on the low end for active service, I know from a letter he wrote that he got a 10% increase due to time he had spent in the reserves.

Furthermore, part of my grandfather's earnings in 1942 was for one month as a Postal Inspector in the St. Louis Post Office.  I have no idea what he earned for that one month.  My grandmother's OPF contains a nice spreadsheet outlining her salary for every year at the Post Office.  Unfortunately, my grandfather's doesn't have a comparable page.

An excerpt from a letter my grandmother wrote to him helps a little, but not enough

I figured my income tax yesterday and find I’ll have to pay $167.04 federal income tax. I earned only $1489.13 last year as I didn’t start to work until May. The only exemptions I claimed were $500 (for a “single” person) and my contributions and sales tax. I’m leaving all the other exemptions to you because of your larger income. Your income as a POI and army officer (base pay only) amounts to approximately $3430 and possibly $100 additional as interest on investments, so you see it won’t be so bad. I understand that as head of the house you can claim $700 exemption plus $700 for our daughters.  (V-mail sent from Myrtle V Deutsch to Martin J Deutsch - Feb 14, 1943)

$3430 is equivalent to $45,100 on the 2009 Consumer Price Index.  However,  I don't know if that includes the 10% bonus my grandfather received.  (I suspect it doesn't.)  And I know it still includes the unknown salary from the Post Office.

4) However, there is one thing I can compare without any missing variables.  The child deduction.  In 1942 it was $350 per child.  In 2009 dollars, that would be $4,610 on the Consumer Price Index.  Slightly higher than the current $3,650.