Daily Kennebec journal., 1914-02-27

The provisions regarding net in
comes of $4,000 apply only to unmar-
ried persons, or to married persons not
living with wife or husband. A hus-
band and wife living together are en-
titled to an exemption of $4 600 on their
aggregate income. This means that
in case the wife has a separate income,
if this added to the husbands income
amounts to $4,000 the total is subject
to the tax; or, if the wife has no sep
arate income, the husbands income is
taxa BILE only in case it reaches $4,000.
Brt a return must be made if the ag-
gregate income of both is ST. 500 for the
year 1913. The joint exemption, how
ever, would be 3,333.33.
In arriving at his net income the
farmer should start with his gross in
come. This would consist of any
items of the kind above enumerated,
and especially all receipts from the
sale Of products of every description
from the farm This would include all
money received for produce and ami
mails sold, and for the wool ana hides
OF animals slaughtered, If the wool and
hides are sold: but he may deduct
from these items the amounts actually
paid as purchase money for the ami
mails sold or slaughtered during the
year. When the animals raised by the
owner are sold or slaughtered, how
ever, their value should not be deduct
ed.
From the gross income there should
be deducted amounts of money actual
ly paid as expenses for operating the
farm and producing the farm products,
live stock, etc. This would include
hired farm labor, farm supplies pur-
chased that are necessary to carry on
the business and not an investment
that represents principal, etc. Expenses
for repairs on farm property may be
deducted, provided the amount deduct
ed does not exceed the amount spent
for such repairs during the year for
which the return is made. The cost
of replacing tools or machinery may
also be deducted to the extent that
the cost of the new articles does not
exceed the value of the old. No deduc-
ton may be made for the cost of ad-
ditional farm machinery, but credit
may be allowed for the annual depreci-
alton In the value of such machinery.
For example, if a machine cost 500 and
is regarded as good for ten years of
service, the annual depreciation would
be 10 per cent, and q deduction of $40
each year could be made on this ac-
count, as part of the expense OF oper-
ating the farm.
The expense of supporting the lam
ily. however, can not be deducted from
the gross income. Among items Tor
which credit is not allowed are expense
for medical attendance, life insurance,
insurance on dwelling, store accounts,
family supplies, wages OF domestic
servants. and cost of board, room or
house rent for family or personal use.
In case an individual owns MS resi-
dence he cannot deduct the estimated
value of his rent. But a tenant oper-
ating a rented farm as proprietor may
deduct the rent of the farm as part
of the expense of his business.
Farmers are not required to include
in their income the produce taken from
the farm and consumed by the family.
! Only produce sold off the farm is to
be included. A farmer Is not entitled
/ to a deduction for his own labor, or for
/ expense of feeding live stock. He may,
however, deduct such items as cost OF
i fertilizer and other supplies and ma
terials which are used up in the course
! of his operations.
The law provides that for the yea1