The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1918-01-11

IeeulHS CHe pig may De aOOeO TO the
original cost in determining profit, or
they may be omitted here, and in
cluded as part of the general expense
of the farm.
The Salaried Man.
Take the case Of a person on a
salary. Suppose a mar earns $3.50 a
month, is married and lives with his
wife. We will say that his travelling
expenses are 80 cents a day to and
from his business; he is a member of
a club that costs him 500 a year;
his lunch expense is SO cents daily.
Now outside of these items he has no
business expense and the question
we want to determine for him is how
do these expenses figure in his income
tax schedule. Now the law states
that operative expenses is one of the
first items to be deducted from ones
income to determine how much taxes
they are to pay. A man may spend a
great deal of money for clothes, edu-
cation and the like, but unless these
have a direct bearing on his business,
they cannot be deducted. If the edu-
cation is for the business or the
clothes, a uniform or something Of
that order, having a direct bearing on
ones occupation, it may be deducted.
Therefore in our example stated
above the person will deduct the
travelling expense as a business ex-
pense; the club due are a personal
expense and a permanent investment
and will not be deducted, neither will
the lunch expense because it is a per-
sonal living expense.
Partnership Incomes.
"Let US take one more example;
that of two men in a partnership in
the grocery business. During 1917
each partner took 500 a month in
cash and the groceries for his family
out of the business. At the close of
the year they had placed to the part
nership surplus account 81, 1000. There
was an additional $4,000 outstanding
owed by customers for groceries pur-
chased during the year. The ques-
ton is, how will these items affect
each partners income schedule. Now
the law states that salaries and COM
missions and other forms of compen-
sation for services are considered in
come when received, regardless of
when earned; also that living quar-
tiers, board, lodging, rent or expenses
allowed in lieu of salary is income.
The law is clear that accounts re-
ceivable are to be listed as income
and furthermore states that partner
ship gains are income when earned,
whether distributed or not. Therefore
the answer to the above condition is
that each partner must determine the
value of the goods he consumed and
include the amount as part of his in
Each partner must also include
one-half of the surplus account, which
in this cas- is $500 and one-half of
the accounts receivable which again
in this case is 81 1000, as gross income
in addition to the $1,000 drawn out
the year which we stated in
our example.
Germans Taxed to Limit.
"These cases are merely illustrative
Of how fair and discriminating the
intention of the law is. It has been
estimated that the United States this
year will raise 20 per cent of the war
from war taxes. This is a
considerably larger percentage than
in any of the European coun-
Germany particularly is rails
.ng a small proportion of it's war rev.
enues by taxation because it's taxes
the war were almost more
han the people could bear; and
expected to win the war and
from the conquered nations a
zig indemnity with which to meet the
bonded debt it was piling up. BY
'aising a large part of the war ex-
'enses by taxation, the United States
will be in a good financial condition
lfter the war is over, and also be
'eady to help in building up the de-
'astated countries of Europe.
Business generally is likely to con-
niue to be good, but it will constant
y readjust itself to war conditions.
The nor generally this fact is recog-
lized the better it will be for bust
less men and for the nation. How
yer heavy the tax burden may appear
o corporations and individuals, the
act should always be kept in view
hat the needs of the government
nd its allies come first. The nations
esources may be taxed to their ut
most to meet these necessities, and
eople should acquiesce in undertake
ngs which have for their object the
uccessful prosecution of the war. The
lies Of Europe have had to bear a
tremendously heavy tax burden and