The daily progressive-miner., 1918-02-19
ADDITIONAL INFORMANT ON ON INCOME TAX PERSONS EARNING $1, 900 IF SINGLE OR
 s2,OOO IF MARRIED MUST MAKE REPORT E. D. Moore of the Francisco Bar Explains by Method of Question and Answer, Responsibility and
 and Liabilities Unde Income Tax Law N
exemption

A-Yes.
 Q.-I am the guardian of two children under eighteen, both having an in- come over s2,00O. Shall I make a return for each of them? A. Yes; the same applies to any per son acting as administrator, execu- ed such estate had net income of s1.000 or more, and such income is not distributed annually or regular ly.
 Q. How much time have in which to.file the return?
 A.-You have until the close of busi- ness March l. It is advisable to file it before that date and avoid the rush. In case of illness, or ab- sence from the country, and the re- turn cannot be filed by arch 1, write to the collector of your district for an extension of time. He can grant thirty days, but no more. For fur ther extension, application must be made to the Commissioner of h. ternal Revenue at Washington, D.. C.. and good cause must be shown for the request.
 Gross and Net incomes Q-What is meant by gross income? A-"Gross income is the total of all moneys received during the year. from every source. Q.-What is meant by met income?" A-Net income is the amount re- maining after subtracting from gross income the deductions, credits and exemptions which the law al lows. It is the net income that is taxed; therefore find the gross, then make the deductions and compute the tax on the net.
 Q-What is the normal income tax and what is the surtax? A.-The income tax on individuals Is divided into two parts, the ormal and the Additional or Surtax. The Normal tax is a fixed rate on the net income in excess of the personal exemptions. and the Additional or Surtax is at graduated rates on sums in excess of $5,O0O. No exem- ptions or deductions are allowed in figuring the Surtax, but the entire net income must be taken as the basis.
 Q.-What are the normal tax rates under the old law and under the new law?
 A.-Under the old law the normal tax rate is per cent on all sums above exemptions, which are $3,000 for an unmarried person and 5000 for a married person. Under the new law of 1917. the rate is 2 per cent on all sums above s1.000 for an un- married person and above $2,000 for a married person. Thus. an un- married person will pay this year per cent on sums over $1.00O and not over $3,000, and per cent on sums over s3,0O0; while married person will pay per cent on sums over s2O0O and not over $4,000 and Q.-In arriving at the net income what deductions am I allowed to make from the gross income? A. Whether married or single, you are allowed to deduct the following
 1. All the ordinary expenses of doing business. such as rent, labor, fuel, light, heat, insurance, taxes. (except income and excess profits taxes, and for local improvements, like sewers. streets. etc.) interest on mortgages and notes.
 2. Reasonable depreciation on business structures. machinery. trucks and automobiles used in the business. No depreciation can be deducted on your residence.
 3. Lesses from fire. theft, storms shipwreck. when the loss is not compensated for by insurance.
 
 4. Bad debts actually written of the books as uncollectible.
 5. Loss in speculative enter prises not connected with the reg ular business, but such deductions cannot exceed the profits from sim liar transactions.
 8. Contributions or gifts made to any religious, charitable, scientific or educational institution, or to so- cieties for the prevention Of cruelty to animals or children. no part of which inured to the benefit of any private stockho.der: but such con tributions are deductive only to the amount of 15 per cent of the tax payers taxable net income. Business Expensss |Q-Just what may deduct under the item of Business H1pe1ses2