Deming graphic., 1918-01-25
VALUABLE FACTS
ABOUT NEN TAX.
]. P. Farnan, Deputy Income Tax
Collector, Furnishes lIle Graph
Ic Very Valuable Facts
Read This Article With Great Care
and It win Save You a Lot Of
TrOahle and Needless Worry

Income Tax Inspector j. r. Far
nan reached Deming oa Tuesday
evening and will remain here until
Saturday. Mr. Farmdn is acting as
q agpety from the office Collector
OF Internal Revenue Carpenter, Of
PHOENIX The Collector is sending
Oh his field men 70 instruct pros
peplNe taxpayers, particularly those
who have never in the past been sub.
iect to income tax plans. 1t should
be remembered that the present war
income tax is in addition to the reg
ular or pre-war income tax. 1t
is the duty Of ever man and women
to ascertain if he or she is liable
for taxes under either of both laws,
Every single person, not the head of
family, who net income for the
calendar year 1917 equals or ex-
ceeds $1,000 is required to file re-
turn. Every single person not the
head Of a family whose net income
Tor the year 1917 exceeds 81 900 is
required to file return and pay a
tax Of per cent ON the amount in
excess of the $1,000.
Every married person and every
single person who is the head of a
family whose net income equals or
ex ecds $1,000, is required to file a
return.
An additional exemption of $500
Tor each dependent child under IS
wears of age on December 81, 1917,
is allowed to married persons.
Every married person and every
single person who is the head Of u
,ly whose net income exceeds S2,-
GOO Is required to pay tax Of 2 per
cent ON the amount in excess Of the
aolal allowed exemption.
4 single person NAV be the head
of a family il he is the sole sup
pori of a dependent relative.
Blanks are available now for in
diyiduals whose net incomes do not
oyreed $4,000. These are known as
Forms l040 A.
For individuals whose net income
80 eeds $4,000 Form 1O4O should be
rsad These should be obtained from
he Collector Of Internal Revenue al
Phoenix when they are in print.
Corporation and fiduciary forms
are not yet available but should be
chiained from the Collector.
Net income is defined as your to-
M income from all taxable sources
less your proper and allowable de-
ductions.
The principal sources of income
that are classed as exempt are in
tfrest on Liberty Bonds, Federal
Farm Loan Bonds and bonds issued
b. any state, county or city. Like
wise salaries or other compensation
paid state, county or city office
out of State, county or city
are exempt and should not be re-
ported.
Total OF gross income should in.
clude all amounts of salary, wages,
commissions, compensation and fees,
receipts from business operations,
profits from trade of real, personal
or mixed property, rents, interest re-
scived on notes, mortgages and part
aership profits, royalties and diu-
hends
The question naturally arises (;
What are allowable deductions2"
A business man may deduct from the
aross receipts the cost Of goods sold,
unless he carIaes his business on
IN inventory basis, his labor. adyer-
tising, light rent and purchases Of
materials bought for use in the busi-
ness. Money spent for business
equipment, such as counters, show
cases, etc, represent an investment
uf capital and cannot be deducted
~ business expense. Depreciation
may be claimed, however. on pro-
periy used for the purpose Of pro-
ducing income.
All state, county and city taxes
may be deducted by every taxpayer
eycept taxes against local benefits,
such as paving and sewer taxes. In
terest paid on borrowed money NAV
be allowed as deduciible unless the
money borrowed was used to pur-
chase securities, the income from
which is classified as exempt in
come"
After taxpayer computes his net
income he should remember that he
is entitled to deduct from his net