Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1914-02-11
Rates Of Taxation.

Tho income tax act IL divided Into
the normal income tax and an addi-
tional tax. The normal income tax ia
tax OF per cent per annum upon
all the net income In addition to this
normal tax the law provides for fur
Their or additional tax when the total
net income exceeds $4,000.
The following shows the rate and In
crease Of the additional tax:
5 10000 to 5 $4,000 at 10 additional
$4,000 to $4,000 at go additional.
$4,000 to 100000 at go additional.
100000 to $4,000 at 40 additional.
100000 to 100000 at so additional
Over 1000 at SO additional.
Deductions W. Specific Exemptions.
In the income tax act we find the
words I'd, auctions" and specific ex-
emptions." Deductions are allowable
in the ascertainment Of net income;
the deductions are allowed for both the
normal and additional tax. The speci-
fic exemptions are applicable to the
normal tax only and are not to be con-
sidered when dealing with the addi-
tional tax.
Deductions.
~ Necessary Business Expenses.
The necessary expenses actually PAID
in carrying on the business may be
deducted. This means that all neces-
sary expenses, such as clerk hire,
rental Of place of business, light, sta :
tionery. and expenses growing out of
the conduct Of the business properly
deductible: but this does not include
pers onal. living or family expenses,
such as medical attendance. store ac-
counts, family supplies, wages of do
mestic servants. room or house rent,
board, etc.
(2) Interest on Debts. All interest
paid out in the year on Indebtedness
may be deducted. This is confined to
the interest paid out in the year on
an Indebtedness and should not include
any interest which had accumulated
and was payable in previous years.
co Taxes. All taxes paid within the
year. except those assessed against To-
cal benefits, may be deducted. Assess
nents made upon real estate Of par
ticu!ar locality on account OF street i'm
provements and the like can not be de-
Quoted, because they are not in their
nature taxes but are really assess
ments which increase the value Of the
property affected to an amount equal
TO the assessment made.
% Actual Losses. Losses actually
sustained and incurred in trade or
arising from fire. storms or shtpwreck.
which are not compensated by insur-
aace or in some other manner. may be
deducted.
90 Worthless Debts. Debts due to
Actually erfaip6d TO be
worthless and charged off within the
year may be deducted When the loss
is thus ascertained which usually does
not happen until after the lapse Of a
period Of time, it shall be charged off
asset of the business or Of the person
making the return.
60 Depreciation. A reasonable al
lowance for exhaustion. wear and tear
of property arising out Of Its use or
employment in the business may be de-
dncted from the gross income. This
should only cover the depreciation OF
the property and is given on the
ground that the property must some
time be renewed or replaced. Since
there Is no allowance for new buildings
or permanent Improvements or better
ments, which are made to increase the
value of the property or estate, this
method has been resorted to. What
such reasonable allowance for depre-
cha ton is, is not mentioned in the act,
except in the case of mines, when 1t is
not to be more than 5 per cent OF the
gross value at the time Of the output
FOR which computation Is made; but
It may be said that this Is to be gov
arned by the fixed rules governing