Jasper County Democrat, Volume 20, Number 59, Rensselaer, Jasper County, 24 October 1917 — GENERAL AND STATE NEWS [ARTICLE]

GENERAL AND STATE NEWS

Telegraphic Reports From Many Parts of the Country. SHORT RITS OF THE UNUSUAL Happenings in the Nearby Cities and Towns —Matters of Minor Mention From Many Places. EXPLANATION OF INCOME TAX Duty of All Concerned to Report Beforo March 1, 1018. Who must pay? Every unmarried man. woman or child with a net income from wages, profits, interests, rent or any other source exceeding SI,OOO for the calendar year 1917, and every married person with a net income exceeding $2,000. Returns must be made under oath on or before March 1, 1918, by every person with an income exceeding the amounts named above even if there is no tax due, under penalty of S2O to SI,OOO for failure.

How to calculate net income. Net income, upon which the tax is levied is calculated by taking the total amount of money received by the individual during the year from all sources and deducting from that amount the following items: Necessary expenses actually paid in carrying on any business or trade but not including personal living or family expenses. All interest paid within the year on indebtedness except interest on loans made for the purchase of tax exempt securities. All taxes, local, state and federal, except income and war profits taxes. Losses actually sustained during the year in business or trade or from fires, storms, theft, etc. Debts ascertained to be worthless and actually charged off. Reasonable allowance for wear and tear of property employed in business. Contributions for religious, charitable, scientific or educational purposes to an amount not in excess of 15 per cent of the net income without the benefit of this paragraph. Exemptions: Unmarried persons have SI,OOO exempt from income tax; married persons have $2,000 exempt and in addition S2OO exemption for each dependent child under eighteen years of age. . Tax rates: The taxes levied upon incomes are a composite result of four separate sets of taxes —the "normal” tax rates in the old revenue bill and the new, the "supertax” rates in the old bill and the new. For example: Under the old law there was a normal tax of 2 per cent on all Incomes of unmarried persons over $3,000; the new bill adds a new normal tax of 2 per cent and lowers the exemption to $1,000; under the old bill supertaxes started with $20,000, and these supertaxes still stand, but there have been added new supertaxes beginning with $5,000. The result is very confusing. In order to bring all the existing rates into simple form they have been combined into a single table which shows for each separate class of income the total tax rate that will be levied upon it. The method of using the table can best be explained as follows: If you are married with no children, and have an income of $6,000 you will pay no tax on $2,000 which is exempt under the law. On the $2,000 falling into the tax group $2,000 to $4,000, you will pay 2 per cent or S4O; on the SI,OOO falling in the tax group $4,000 to $5,000 you will pay 4 per cent or S4O; on the SI,OOO falling in the tax group $5,000 to $6,000, you will pay 5 per cent or SSO, making a total income" tax of $l3O. If you have two children under eighteen years, you have an exemption of S2OO for each, so that yoi would pay no tax on $2,400; 2 per cent on $1,600 between your $2,400 exemption and $4,000; 4 per cent on SI,OOO between $4,000 and $5,000; 5 per cent on SI,OOO between $5,000 and $6,000, making a total tax of $122.