The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1913-12-25


==s=zzzEzz-s-======z
IS not pad By the United States Rovern-
ment. II. The exemption OF 1900 or $500
for couples living together, As above es-
planned, these deductions are allowed in
calculating net income for the normal tax
For the additional tax items and are
not allowed.
o.-Can personal. living or family ex-
penses be deduotedf A--No.
o.-Is an assessment for local benefits
deemed q tax and deducttble AZ such
A-Eo. The statute expressly provides
that such assessments shall net be de-
Quoted.
o-can any deduction be allowed for
oogt OF new buildings. improvements or
betterments made to increase the value OF
any property? A--No.
0.-what 10 meant by the necessary ex-
penses paid In carrying on business? A.
Clerk hire. rent. lighting. heating. sta
tionery. delivery charges, etc.
Q.-suppose have allowed state or
local taxes to accumulate for several
years: can I deduct the payment Of &C
cunulated taxes, or can only deduct the
taxes which fell due within the year for
which made an income tax return7 A
You can deduct all the tax payments,
whether they were accumulated or not
Q.-Whak deductions are allowed to cor
poratfons9 Al. The ordinary and neoes-
sary expenses incurred in maintaining ana
operating the business and properties of
the company, including rentals. z All
losses actually sustained and not conpeR-
stated by Insurance. or otherwise, includ-
ing reasonable allowance for deprecia-
ton. 3. Interest paid on bonded and other
Indebtedness to an amount Of such In
debtedness not exceeding one-half the In
terest bearing Indebtedness and It's out
standing capital stock. 4 All taxes, ma
tional or state Or imposed by q foreign
government.
o.-Is g corporation entitled to an ex-
emption Of 50. 900 81. 600 like indtvid-
usl? A--No. There are no exemptions in
the case Of corporations; they are allowed
to deduct the expenses, losses, interest
and taxes as already explained.
Q.-Individuals may deduct dividends:
can a corporation deduct dividends re-
ceivsd from other corporations7 A.-Eo.
while this appears to result in double
taxation. . tax OF per cent having been
paid upon the dtvid ends by the corpora
ton from which they were received. con-
gress intended to tax dividends received
by one corporation from another.
Q.-Does the present income tax law
take the place OF the corporation income
tax law Of 1902 Ayes, but for the
months Of January and February. 1913.
mains in force. The present income tax
law goes into effect from March 1, 1913.
Collection at Source.
o.-what is meant by the collection Of
this tax eat the sourceT' A-The law
provides that all persons, firms and corpo-
rations paying interest, rent salaries, an
nuIties or other fixed or determinable an
nual or periodical gains, profits and in
come Of any other person exceeding 5000
per year shall withhold 1 per cent and
pay 1t to the government the normal
tax upon that portion Of the income Of
tho person who was entitled to receive the
rent. salary, income, annuity. etc.
Of the annual rent on my home or
place OF business is $500 and know that
the landlord has other income which
would make him taxable, shall l deduct
per cent from my rent? A.-No; YOU can
only make the deduction = divided the rent
you pay exceeds $1,000 per year, and this
same principle applies to all payments of
rent salary, interest, annuities, etc, with
the sole exception Of interest on corporate
bonds
Q.-n the interest on corporate bonds
amounts to less than 5000. aaust the
per cent be deducted at the source? A.
Yes; the law provides that where the in
come is interest on corporate bonds the
tax must be deducted at the source. ire
spective of the amount Of the interest
payment.
OF rent or salary payable by me
amounts to $500 or less I understand
withhold no tax, but IL it amounts to
more than 5000, do withhold the tax on
the excess or on the whole arnount7 A.
You withhold the tax the whole
amount For example. II rent or salary
due from you amounts to 900 or less you
deduct nothing but II It amounts to S, 500
you must deduct $S5-namely, 1 per cent
OF the entire So 500
Q.-Cen the person entitled to rent sal
airy. interest, annuity, etc., claim an ex-
eInption? Ayes; by fling notice with
you ne can claim and obtain an exenp-
ton Of 5000 (or 5000 II married and with
a wife living with him): in that case you
should only deduct the per cent from
the excess over the exemption. For ex-
ample, II landlord or employee is en-
titled to 5000 year and files with you an
exemption as a married man amounting to
1900 you would only deduct s1o-nameiy, l
per cent on the excess OF $1,000.
0--How about the collection Of coupons
on corporate bondsf A.-The interest is
to be deducted by the corporation The
owner Of the coupon must then file a GER
tlncate Of ownership with the bank or
other concern which receives tho coupon
Tor collection, otherwise that bank would
have to deduct the tax and attach its own
ceruncate. giving the name of the owner
The owner has right to claim exerap-
uon up to s. 600 IL single or $4,000 Il mar
r1ed The forms OF certificates Of owner
snip ana OF exemptions have been pre-
scrtbed and may be obtained from the col
Iector
o--In deducting the tax from rent. sal
airy and interest, shall deduct from each
payment or wait until g 900 has been paid !?
A.-Under the regulations you need not
withhold the tax until such time as the
rent, salary or interest shall have reached
an aggregate in excess OF s.. 900. The tax
full amount or from 5000 or 5000 less IL
notice Of exem0fiau has haar SIa5