Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1914-02-04
INCOME TAX.
Questions Answered by Louis Muir
ply, Collector of Internal Reve-
nue. for Iowa.


to forecast decisions of the Treasury
Department on questions certain to
arise under the law
Q.-I. received $4,000 income
from all sources during the ten
months, March lst to December 81,
1913. The law says that only per-
sons having net income in excess
of $4,000 year shall make a return.
Does this mean that as for the ten
months referred to, / shall be requir-
ed to make no return.
A.-Persons whose net income
from March 1st to December 31st
last amounted to $4,000 or more are
subject to the income tax and must
file a return of their net income for
the year 1913. This decision has
been announced by the Treasury De-
partment. The decision in part is as
follows:
Since the return of annual net
income for the year 1913, as applied
to individuals, is for but five-sixths
of the calendar year, and as the law
provides that returns shall be made
on the basis of five-sixths of the
year, it is held that individuals whose
net income is $4,000 or more for the
ten months constituting the taxable
period of lib shall make returns
of annual net income in accordance
with the general provisions of the
law covering the 1913 taxable per-
iod."
Q.-Must / on my own motion
make report of my income for the
period March 1st to December 31st
1913, inclusive?
AVERY person having an in.
come of $4,000 exclusive. of income
received from government bonds OF
bonds of state or political subdi-
vision thereof, or as an officer or en-
ploye of state or political sub-divi-
sion thereby during the period
March 1st to December 31st, inclu.
sive must make return of income
After 1913, all persons having in.
comes, as qualified, of $4,000 a year
must make return. The person hav.
| ing such income who fails to make
return for 1918 before March list
1914, is subject to a penalty of from
$40 to $1,000.
Q.-Are dividends from life insur-
ance policies taxable?
A.-Dividends derived from paid
up policies and which are in the ma
ture of annultieS, are subject to the
tax, but dividends which decrease by
their amount the annual premium
to be paid are not taxable.
Q.-Must an executor of an estate
make a return, and what is his ex-
emption?
Aft the income of an estate is
in excess of $4,000 a return must be
made. The estate as such is not en-.
titled to an exemption; however
each beneficiary may claim against
his or her share of the income aris-
ing from such estate an exemption
of $4,000 or $4,000, as the case may
be, by filling certificate with the
executor or trustee: for 1913 the ex-
emption is $4,000 or $3,333.33.
when must the return be
made, to whom, and when must pay
ment be made?
A.-The return must be made to
the Collector of Internal Revenue at
Dubuque (for residents of Iowa.
not later than March 1st, 1914. Pay
ment must be made on or before
June goth, 1914.
Q.-How much exemption has a
widow with two minor children?
A.-For the year 1913 she has an
exemption of $4,000; thereafter
$4,000 yearly. There is no exemp-
lions allowed for children or other
dependents.
Q.-Must a corporation paying
the normal tax on its net earnings
file certificate of exemption with
those of it's tenants from whom il
receives rent, or individual debtors,
from whom it receives interest in
excess of $4,000 yearly?
A.-No, that requirement applies
only to individuals.
Q.-Must soldiers pensions be re-
turned as income, and are they tax
able?
A.-Yes.
Q.-I saw the Chicago Tribune
under date of January 18th, that IA
corporation pays the tax from Janu-
airy 1st to March 1st, 1918, with an
exemption of one-sixth of $1,000 and
from March 1st it pays an income
tax and is not entitled to any speci-
fic exemption, but is entitled to de-
duct five-sixths of the annual deduc.
tons set forth in subdivision B OF
paragraph G of the Act" Is it right
Alt is not. The income-taA
law repealed the corporation excise
tax law which permitted an exemp-
ton of $1,000. A special excise taA
was re-enacted for the months OF
January and February, 1918, fol
which period the net income shall be
ascertained in the same manner as II
shall be ascertained for the balance
or the year. ! quote from the law:
And provided further, That a
special excise tax with respect to
the carrying on or doing of business
equivalent to l per centum upon
their entire net income, shall be le-
wed, upon corporations, etc."
Q.-As | understand it, my in
come must be $4,000 a year over
and above expenses before / am
Obliged to make return of my in
come to you. Am ! right in this?
avery person having an IN
come In excess of $4,000 is required
to make return regardless of allow
able deductions that may be claimed
by reason OF exemption. For illustra-
tlon, II the income of a married man
llving with his wife is $4,000 year
he will nevertheless make a return,
settiig out the sources of his income
ana claim deduction of $1,000. He