The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-09-30
.HOWINCOME TAxWORKS
Details of Method of Collection Are
Given Out.

| Washington, Sept. 30.-The treasury
department is preparing for a Hood OF
| questions about the new income tax,
realizing that this feature of the tar1H
bill to become law strikes more in
j timately at the tax paying citizens than
do the indirect taxes collected through
the customs duties. One of the first
steps taken to get general Informatlon
before the house will be to distribute
blanks through postoffices, internal rev.
enue offices and other federal agencies
The fact that he does not receive
blank or a request to pay the tax Will
not exempt a taxable person from the
penalty of the law. Representative Cor
| dell Hull of Tennessee who drew the
| income tax provision of the tariff Dill
which will soon become law, made pub
lie today a detailed explanation of the
plan as it will touch the individual CIT
izen.
The treas regulations soon to pc
prepared will make clear to every tax
payer the requirements of the law ana
| it's appIica ton to income derived from
the various kinds of business" said Mr.
Hull. ANY person who keeps familiar
with his business affairs during the
| year should have no difficulty in exc
| cutting his tax returns. The income tax
| Is divided into two phases, the norman
tax of 1 per cent on the whole income
above SO, 600 and the additional tax that
begins with an extra 1 per cent above
$40, 900 and is graduated to per cent
above $500, 900 Wherever the income tax
is paid AT the source by corporation
for its employees or in similar cases,
only the 1 per cent normal tax is SO
paid The individual has to pay any
additional tax himself.
Collection at Source.
The provisions of the law requiring
the tax to be withheld at the source
does not take effect until November l,
1918.
For the first year the citizens will
make return to the local internal reve-
nue. collector before March 1, 1914, as to
his earnings from March 1, 1918, to the
end of this year. The collector Will no
tify him June l how much he owes
and the tax must be paid by June 80.
After next year the tax will apply on
the full calendar year.
IF the income of a person is under
s., 900, if the tax upon same is with
held for payment at the source or il
the same is to be paid elsewhere in the
United States, affidavit may be made
to such fact and thereupon return viii |
be required. The tax covers all in
comes of citizens of the United States
whether living here or abroad. Those
of foreigners living in the United States
and the net incomes from property own
ed or business carried on in the United
States by persons living abroad.
THE net income includes all incomes
from salaries or any compensation for |
personal services incomes from trades |
professions, business or commerce.; from |
sales or dealings in personal property |
or real estate; from interest, rent, divi- |
dends from securities, for all business
carried on for gain.
Requests will not be considered in |
come; nor will life Insurance paid to a
or returned to the insured
person as a paid up or surrendered |
policy be taxable. Interest on such |
property will be included as income, |
however.
Legal Deduction.
1.-THE amount that may be deducted |
from a total income includes the cost |
of carrying on business, actual losses, |
allowances and tax eX- |
empt or tax paid money. Living ex- |
penses cannot be deducted nor can |
money spent for permanent improve |
ment to property
The form that is to be filed out by |
the taxpayer will be drawn up soon by |
the commissioner of internal revenue. |
The taxpayer will have to give his gross |
revenue and then specify and claim the !
deductions to which he feels entitled. /
Unless a mans income tax is paid at |
the source he must hunt up a tax |
blank, fill it out and see that 1t finds |
it's way to the proper federal official in |
his district before March 1, 1914.
Firms, corporations and the like |
having the handling of interest, rents, |
salaries or other portions Of the in |
come of any citizen are compelled to |
deduct the tax for the individual and |
pay it to the government. The individ- |
ual then will receive receipt showing |
ne has maid his tax