The Bridgeport times and evening farmer., 1918-02-07

Roen prepared with the approval OF
u. S. Revenue experts tells how, when
and where to do it. The first thing to
Abc understood is that the income tax
applies only to your income for the
calendar year 1917. Your income for
prior years and your estimated in
come for 1918 are not to be consider
ed.
The War Revenue Act of October
3, 1917, provides for a normal rate of
tax of 2 per cent, on net incomes OF
unmarried persons in excess Of ST.
600 and upon incomes Of married per-
sons or heads of families in excess of
$4,000. If you $re unmarried and
your income for 1917 was 81, 900 or
more you must get a tax blank, fill
it, out and file it with the collector
of, internal revenue in the district in
which you live. If married and your
net income was $4,000 or more you
must file a return with the collector.
Returns must be in the hands of col
Electors not later than March 1, 1918.
The old income tax under the Act of
September s, 1916 still is in effect, so
that the total of your tax will be
the sum of these taxes added togeth-
er. Under the act of 1916 the normal
rate of tax is per cent. on incomes
of married persons in excess OF S4,-
900 and on incomes of single persons
in excess of $4,000.
For example, if you are married
and your net income for 1917 was
$4,000 you will pay tax of $50. This
is per cent. on the amount above
your exemption of $4,000 under the
act of 1917 and 2 per cent. on the
amount above your exemption of $4,-
goo under act of 1916. An additional
exemption of 5000 is allowed a mar
ried person or head of a family for
each dependent child if under eigh-
teen years of age or incapable of self
support.
A taxpayer is considered to be the
head of a family and entitled to all
the exemptions allowed married
person if he is actually supporting
one or more persons closely connect
ed with him by blood relationship,
relationship by marriage, or by adop-
ton.
Women as we'll as men must pay
an income tax. The combined net
income of a married. couple in excess
r of $4,000 is assessed. They may file
a. Joint return or each file a seperate
return if desired If joint return
is filed either one may claim the ex
emption or it may be divided between
them. A widow, a woman living
apart from her husband or a maid
is assessed on her net income above
$1,000.
met income" means gross income
LESS certain deductions provided for
the act. Expenses actually in
red in carrying on any business
may be deducted, but not family nor
living expenses.
In making out your return you may
deduct, the following from gross in
come: Interest paid on mortgages
and notes and other Indebtedness, ex-
cept indebtness for the puchase of
tax exempt securities;
Rent paid for Offices or business
places.
Taxes paid, except for local i'm
provements such as sewer and water,
income taxes and excess profits taxes;
Losses sustained in business or trade
arising from fires, storm or other
casualty or by theft; if not compen-
stated for by insurance or otherwise
If property was purchased prior to
March /, 1913, the fair market price
or value on March /, 1913 is the basis
for figuring the loss.
Losses sustained in speculations
and side lines not connected with
your regular business, but these de-
auctions must not exceed the profits
from similar transactions.
Debts ascertained to be worthless
and charged off within the year.
Reasonable depreciation for bust
ness structures but not for your resi-
dence.
Depreciation for oil. gas wells,
mines, etc.
You must include under gross in
come the following items:
Salaries, wages and commissions or
COMPENSATION of whatever kind for
personal services.
All profits derived from business
trade or commerce.
Profits from the sale of property
real or personal.
Rents.
Interest on notes, bonds and bank
deposits, including savings banks.
Incomes received from fiduciaries
that is amounts received from in
comes of estates, trusts, etc, through
trustees, administrators or executors
Dividends on stock, whether receiv
ed as cash or stock. Only dividends
paid out of earnings or profits earned
since March l, 1918 are taxable.
Net partnership profits, whether di
vided and distributed or not.
Royalties from mines, oil and ga
wells, patents, copyrights and fran
chises.
!, The following items are not taxabl
and need not be reported in your re
turn:
Gifts.
Value of property acquired through
will or by inheritance. It must b
understood, however, that the incom
received from such property is tax
able.
Proceeds of life insurance policie:
Returns of premiums on life en-
dCwment and annuity policies.
Interest on bonds and other obi
cations of the United States govern
rnent or its possessions and of an
state or political subdivision of a stat
such as city, town, county or vii
lage.
Interest on the Second Libert
Bond issue of September "a. 1917
an amount not exceeding $1,000 {
such bonds. If you own more tina
that amount the interest on the add
tional bonds is exempt from the mol
NAL tax but not from the surtax.
Interest on securities issued undo
the provisions of the Federal FAR
Loan Act of July II, 1916.
salaries of officers and employt
~ a. state or political subdivision