Five Mile Beach weekly journal., 1913-12-05

1t includes the income from such prop
erty.
Q.-Will proceeds of life insurance poll
cies paid upon death or paid upon the ma
turity of a term or upon surrender of a
policy be included as income? A.-No.
Rates of Taxation.
Q.-What Is the rate of taxation? A
The normal rate is l per cent of the net
income. and this applies to corporations
as well as to individuals. In the case of
individuals having a net income exceed
ing $4,000 the law provides for an addi-
tional tax.
Q.-What is the rate of the additional
tax against incomes of individuals? A.
One per cent on amount by which income
exceeds $4,000 but does not exceed $50, 900
2 per cent on amount by which income ex-
ceeds $4,000 but does not exceed $75, 900;
8 per cent on amount by which income ex-
ceeds SIS, 600 but does not exceed 100000; 4
per cent on amount by which income ex-
ceeds 100000 but does not exceed $3.50, 600
8 per cent on amount by which income x
ceeds $250.000 but does not exceed $500, 900;
6 per cent on amount by which income ex-
ceeds 100000.
Q.-Are corporations ever liable for the
additional tax? A.-Never.
Q.-In calculating net income for the adj
ditional tax, are the same deductions
made as in calculating net income for the
normal tax of l per cent? Ayes, with
the exception that in calculating net in
come for the additional tax neither divi-
dends nor amount of income on which tax
is withheld at the source viii be deducted
Exemptions and Deductions.
Q.-Is there any exemption allowed to a
taxable person? Ayes, $1,000; and il the
person is married and his wife lives with
him the exemption is $1,000 more, making
1000 in all. The same provision is made
II the person making the return is a mar
ried woman whose husband lives with her.
Q.-Can husband and wife each deduct
the additional $1,000? A.-No. Only one
deduction of $4,000 shall be made from the
aggregate income of husband and wife
when living together.
Q.-Can guardians, trustees, executors,
ETC., deduct the exemption of $1,000 fol
the benefit of the person for whom they
act? Ayes.
Q.-What deductions can be made by an
Individual for expenses, etc? Al. Neces-
sary expense actually paid i'll carrying
on business. 2. All interest paid on in
d~ebtedness. 8. All national, state. county,
school and municipal taxes. 4. All losses
actually sustained in trade or arising
from fire, storms or ~shipwreck and not
compensated by insurance or otherwise
s. Debts due and found worthless and
charged off. 6. Reasonable allowance fol-
wear and tear. 7. Dividends received from
corporations which pay income tax. g.
Amount of income on which tax is paid
or withheld at the source, provided such
income does not exceed $4,000 or is irregu-
lar as to time and amount. 9. Interest or
obligations OF the United States a state
or a political subdivision of a state. 10
Salaries of the present president OF the
United States, present judges of the fed
eral courts and the compensation of all
officers, employees Of a state or a political
subdivision of a state, provided the same
is not paid by the United States govern
ment. II. The exemption of $1,000 or %.0M
for couples living together. AS above ex-
planned, these deductions are allowed in
calculating net income for the normal tax.
For the additional tax items z and s are
not allowed.
Q.-Can personal. living or family ex-
penses be deducted? A.-No.
Q.-Is an assessment for local benefits
deemed a tax and deductible as such?
| A.-No. The statute expressly provides
that such assessments shall not be de-
iucted.
Q.-Can any deduction be allowed for
cost of new buildings, improvements or
betterments made to increase the value of
any property? A.-No.
Q.-What is meant by the necessary ex-
penses paid in carrying on business? A.
Clerk hire. rent, lighting. heating, sta
tioy cry, delivery charges, etc.
Q.-Suppose l have allowed state or
local taxes to accumulate for several
years; can I educt the payment of ac-
cumulated taxes, or can / only deduct the
taxes which fell due within the year for
which I made an income tax return? A.
You can deduct all the tax payments,
whether they were accumulated or not.
Q.-What deductions are allowed to cor
porations? Al. The ordinary and neces-
sary expenses Incurred in maintaining ano
operating the business and properties of
the company, including rentals. q All
losses actually sustained and not compen-
stated by insurance or otherwise, includ-
ing reasonable allowance for deprecia-
ton. 3. Interest paid on bonded and other
Indebtedness to an amour of such in
d~ebtedness not exceeding one-half the In
terest bearing Indebtedness and its out
standing capital stock. 4. All taxes, ma
tional or state or imposed by a foreign
government.
Q.-ls a corporation entitled to an ex-
emption of $500 or $4,000 like an individ-
ual? 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-
ceived from other corporations? A.-No.
while this appears to result in a double
taxation. a tax of / per cent having been
49, a : -