Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-10-20
Tho New Income Tax

Q ENERAL million Americans will be add ed
~ TO the class of income taxpayers under
tho new tax law enacted by Congress,
now in effect. and in consequence there is
much confusion in tho public mind to just
who arc subject to it and as to the necessary
procedure to comply with its terms and avoid
its penalties
AS to how it affects the great mass Of the
people, it may be stated that the income tax.
under the new law must be paid by every
unmarried man. woman or child with net
income from wages. profits interest, rent or
any other source of $1,000 or more for the
calendar year 1917. and by every married
persons with net income OF $4,000 or more.
Returns must be made under oath on be-
fore March 1. 1918. by every person with
net income of the amounts named above,
even if there be no tax due. under penalty
of $50 to $1,000 for failure. Naturally, the
returns In most cases cannot be made until
tho year 1917 has closed. Net incomes upon
which the tax is levied, Is calculated by talk
ing the total amount of money received by
the individual during the year from all
sources and deducting from that amount the
following items: necessary expenses actually
paid i'll carrying on any business trade,
but not including personal, living family
expenses; all interest paid within the year
on Indebtedness. except interest loans
made for the purchase Of taX-exempt securi-
ties; all taxes, local. State and Federal, ex-
cept income and profit taxes: losses &C
tually sustained during the year in business
or trade or from fires, storms theft, ETC.;
debts ascertained to be worthless and actually
charged off; reasonable allowance for wear
and tear OF property employed in business,
contributions for religious. charitable, scien-
tihc or educational purposes to an amount
not in excess of s per cent of the net in
come without the benefit of this agraph
Unmarried persons have $1,000 exempt from
income tax; married persons have $4,000
exempt. and in addition $500 exempt for
each dependent child under eighteen.
The new measure does not replace the
existing normal and "supcrtaX" rates, but
ADDS new set OF rates. For example. under
the old law there was a normal tax OF
per cent on all incomes OF unmarried persons
over $4,000, the new bill adds new normal
tax OF per cent and lowers the exemption
to $1,000: under the old bill, supertaxes
started with $4,000, and those supertaxes
still stand, but there have been added new
supertaxes beginning with $1,000.
Inc excess profit tax Is more complicated
matter Every corporation with a net in
come exceeding $4,000 and every partnership
or individual with net income derived from
the operation of any kind Of business which
exceeds 5000 for the present year is liable
10 pay tax on the amount of its excess
profits. This includes everybody who BUYS
or sells anything. all kinds of agents and
commission men. including commercial
travellers, unless they are on a fixed salary
without commissions 1t is also claimed
that II includes all kinds Of professions
strlking farmers. doctors. lawyers authors.
real estate men and every one not on q fixed
wage or salary, and whose earnings are big
enough 10 come within the scope of the law