Jasper County Democrat, Volume 20, Number 101, Rensselaer, Jasper County, 20 March 1918 — FEDERAL INCOME TAX IN BRIEF [ARTICLE]

FEDERAL INCOME TAX IN BRIEF

r The Requirements Boiled Down for 4 Busy Folks. Returns must be filed on or before April 1, 1918. Tax due may be paid now or on or before June 15, 1918. If you were single and jour let .n----come for 1917 was SI,OOO or more you must file a return. If you were married and living with wife (or husband) and had a net income of $2,000 or more for 1917 you must file a return. Husband's and wife's income nust be considered Jointly, plus income of minor children. Income of a minor or incompetent, derived from a separate estate, must be reported by his legal representative. Severe penalties are provided for those who neglect or evade the law.

For false or fraudulent return there is a penalty not exceeding $2,000 tine or year's imprisonment, or both, plus 100 per cent, of tax. For failure to make return on or before April 1, 1918, fine Is from S2O to SI,OOO, plus 50 per cent, of tax due. Returns must be filed with the Collector of Internal Revenue of district in which you live. An agent may file return for a person who Is ill, absent from the country or otherwise Incapacitated. Each return must be signed and isworn or affirmed by person executing It. Single persons are allowed SI,OOO exemption in computing normal tax. A married person living with wife (or husband) is allowed $2,000 exemption, plus S2OO for each dependent child under 18. j A head of family, though single. Is allowed $2,000 exemption If actually supporting one or more relatives. Returns mmt show the entire amount of earnings, gains and profit* received during the year. Officials and employees are not taxable on the salaries or wages received from a state, county, city or town In the United States. Interest on state and municipal bonds Issued within the U. S. Is exempt from federal Income tax and should be omitted. Interest on United States government bonds is also exempt, except on Individual holdings of Liberty Four* In excess of $5,000 par value. Dividends are not subject to normal tax, but must be reported and Included In net Income. Gifts and legacies are not Income and should not he included on the return of the beneficiary. Life Insurance received as a beneficiary or as premiums paid back at maturity or surrender of policy is not Income.

Payments received for real or personal property sold Is not Income, hut the profit realized thereon Is income for the year of sale. ■ Amounts received in payment of notes or mortgages is not income, but the interest on such notes or mortgages is taxable Income. From the entire gross income certain allowances are made in arriving at the net Income. Necessary expenses actually paid in the conduct of business, trade or profession may be claimed. A farmer can claim payments for labor, seed, fertilizer, stock feed, repairs on buildings, except his dwelling; repairs of fences and farm machinery, materials and small tools for immediate use. The amount of rent paid for a farm may also be claimed as a tenant farm- - er's expense. Payments for *:ve stock are allowable if bought for resale. Rut if bought for breeding purposes cattle are an investment, not an expense, and cannot be allowed. A storekeeper can claim amounts paid for advertising, clerk hire, telephone, watbr, light and fuel, also drayage and freight bills and cost of operating and repairing wagons and trucks. A physician can claim cost of his professional supplies, rent, office help, telephone, expense of team or automobile used In making professional calls and expenses attending medical conventions.

A dentist can claim similar items, except team or auto expense, which are not necessary in his profession. Expenses that are personal or connected in any way with the support or well being of a person or family are not allowable. Tim costs of machines, instruments, vehicles or implements tha,t nre more or less permanent in character are not allowable as an expense. They are investments. .Interest paid on a mortgage or other personal indebtedness is allowable on u personal return. All taxes paid within the year can be taken out on a federal return, except federal income taxes, inheritance taxes and assessments for local improvements. Losses sustained in business or through fire, storm or shipwreck or by theft, except when compensated by insurance or otherwise. Wear and tear of rented buildings or machinery used in business may be claimed. ' You can also claim the amount paid to the Red Cross and to other charitable, religious or educational organization to the extent of 15 per cent of your net Income. '