The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-01-29
INCOME TAX LAW
EXPLAINED TO CLUB
f. M. Smith Reviews New
Law Before Richmond
Business Men.
OFFERS SUGGESTIONS

Lawyers, bankers, manufacturers
business men and other professional
men who will be directly or indirectly
affected by the new income tax. heart
the address Of Frank M. Smith, Of
indianapolis, one of the attaches Of
the Internal Revenue office, at the
Commercial club rooms last night.
The early part of the meeting was
devoted to paper containing a brle
review of the law and comparative
elements with similar laws in Other
countries.
The ~~ority of the southeastern
states have state income tax law
which has been in force for number
of years." said Mr.. Smith.
A few suggestions offered by Mr.
Smith to those who are not quite
clear on the matter are as follows:
In case of partnership each in
divdual fills out separate re-
port and not a report for the ex-
penditures and receipts of the
partnership.
Some Bonds Exempt.
Where a persons sole income
is from corporate bonds or bonds
not otherwise exempt, then the
person must report the exact
amount of the income derived
from bonds but if the income is
less than $4,000 then no taxes
will be collected and over that
amount tax will be collected.
All taxes will be collected at the
source. In making returns for
bonds, which designate on their
face that the issuer of the bonds
will pay the tax then the holder of
the bond will be required to make
return but indicate the kind of
bond, its denomination and the
company which issues the bond.
The company issuing such a bond
is required to withhold from the
interest on the bond enough
money to pay the tax but some
companies have agreed to pay the
tax as a matter of accommodate
ton to their customers.
The expenses incurred in oper-
ating factory, paying lease on
building, fire insurance may be
deducted in calculating the net
earnings.
The janitor hire, coal. water
rental, agency and running eXpen-
ses of real estate are included in
the figures denoting the mainten-
ance and are deductable.
Fire insurance is deductab1e
because it has been ruled that it
is necessary as part of the furd
to maintain the running of the
plant or real estate.
Life insurance is not considered
deductable.
A widow should make return
as if she were an unmarried
woman.
To corporations the returns will in
:lude statements of earnings for TIL
entire year but to personal or individ
ual returns only earnings received Of
and since March l should be reported
To Repeal Excise Law.
The corporations must pay for tn
entire year because at the end of 1911
the old corporation excise law wa
repealed, a new one in force for tw'
months was passed under the sam
title and the tax is computed on tn
same basis as the income tax.
With the individual returns tn
blanks are filled out and signed to in
clude the earnings for ten month
from March /, 1913. Even money from
notes, or bonds. which falls due o.
March l. must be included in the re
port. Although the money was earne
before the law became effective tn
rule by the department is that ia
must be paid on that money as a
earning.
Corporations make reports for fisca
year while individuals make report 70
calander year
Repairs Detachable.
Repairs made to house, flat or built
ing are deductable but new work o
the premises which is permanent an
adds to the value must be included i
the report, Painting is considered d.
ductable because it is ruled as
method of preserving the buildings.
If a merchant, banker or bushes
man has a bill outstanding at tn
close of the fiscal year and he b,
lieves the bill good and there is ce
tain per cent profit represented in tn
bill then he must include this profit i