The Leon reporter. (Leon, Iowa) 1887-1930, 1917-01-11
CHANGES INCOME TAX
New Income Tax Law Makes Many
Changes. If Your Income Is
$1,000 You Must Report.

zens to make report to the govern
ment who have not heretofore re-
-orted. Read this article carefully,
for If you fail to comply with the
provisions OF the new law you are
subject to a heavy fine.
It is estimated that fully three
thousand Iowans who heretofore
have not made income tax returns to
the federal government are this year
subject to the requirements OF the
law. A great many people do not
law, enacted on October 3, 1913. has
been repealed and is succeeded by
the new income tax law, enacted
September 8, 1916; and not know
ing this, they do not know OF the
changes made.
Until this year, if persons net
over So, 5000, he was not required to
include corporation dividends in his
return. This year, however, ne must
include them. Heretofore if a per-
sons net income was under SIC, 900
but was all from dividends, he was
not obliged to make a return: But
this year if ones net, income is 49,,
900 or more, no matter if it is all
from dividends, or if only a part is
from dividends, that person must
make a return, even if he shall not
have any tax to pay.
Net income DeHnou.
1t is hard to remove a popular and
mind Many a person says to him
self, My income Aast year was less
than my exemption of $4,000, Cor
not more than my exemption) SO l
don't have to make return. rms
is a mistake. No matter what ones
of $4,000 during the preceding cal
endar year, no matter from what
source received, he must make re-
turn before March lst OF the current
year or subject himself to heavy pen
atty.
understG' II Of IS eVerv 0aes kGipd GirGdss less a
these deductions; business or profess
sional expenses; taxes, but not those
for special improvements; interest
paid; debts charged off as uncollect-
able and losses sustained in ones
business, or arising from fire. ETC.,
ance. Personal, family or household
expenses are not deductible, these
Thousands More Must Return.
l have personally met thirty per-
sons this year whose salaries are
from $1,s00 to $2,400 and who get
from $1,000 to $1,000 in dividends
- y
not have to make return Of income.
This year, having net income OF $3,-
900 they must. Bonuses paid em-
ployes in compensation for services
and not as gratuities are income.
The principal changes affecting the
The normal tax of / per cent has
been increased to per cent. The in
creased rate applies to the income for
the year 1916, although Withholding
at source was continued at the rate
of ! per cent through December 81,
1916, withholding at per cent go
ing into effect January I, 1917.
All Dividends Must be Reported.
Heretofore dividends were not re-
quired to be included in returns un-
less the net income exceeded S2O, 900
per year; under the new law divi-
dends must b G included in the re-
turn whenever the income is such as
dividends are not subject to tax un-
less net income exceeds $4,000 per
year..
Under the old law tax payers were
not allowed to deduct losses arising
from the ownership of stocks and
bonds and other intangible property
brokers or dealers in securities; un-
der the new law such losses may be
deducted to an amount not exceed
ing the profits from such transac-
tions.
All returns must hereafter be
made under oath, the affirmation only
covering income must, as usual, be
filed with the collector Of internal
revenue on or before March /, 1917.
Payment of the tax must be made on
or before June IS, 1917. Formerly
payment was not delinquent until
July Rll l. persons presumed to be SUBJ
ject to the tax have been supplied
with forms. Others may have them
on request. Failure to receive forms
does not relieve persons subject to
the tax from obligation to make re-
turn.
Hs1s2isr" Who is Head Lea Of Fam Eamly "
600 was allowed only to persons
married. The law allows it to one
who is the head of family. 1t is
held that when one or more individ-
uals are dependent, either in whole
or in principal part, for their actual
support and maintenance upon, an,
other who, by reason of some legal
or moral obligation, controls and
provides for such individuals, the
one who assumes the support. main
tenance and control of the others is,
for federal income tax purposes, a
head of a family and entitled to
the personal exemption of $4,000"
Other Internal Revenue Taxes.
All corporations the. fair, or mar
ket value of whose shares exceed
$4,000 must, during this month of
January, make a return under the
"captal stock tax" section of the new
revenue law They will have to nay
tax only on the value exceeding $685.
900; but they are required to make
return if the value exceeds $4,000,
even if they will not have to pay
tax Probably 1900 Iowa corpora
tons are subject to this tax.
The capital stock tax, while it af-
fects some of the corporations affect
ed by the income tax on corporation
net earnings, is wholly. different from
and additional to the latter. Returns
of capital stock tax must be made be-
fore February 1 while returns of cor
poration net income must be made
befohe March /, except where corpor-
ationA have been granted authority
to make return for .neir fiscal year.
CorpOR Rtions dissolved during the
rr,f ~ roA ,Nny vii