Warren sheaf. [volume] (Warren, Marshall County, Minn.) 1880-current, 1918-01-09
INCOME TAX
EXPLAINED.
Obscure Points Elucidated for Benefit
of the Public Farmers are
Touched.

Maybe heretofore you have not paid
any attention to the income tax. 1t is
time you did, because failure to re-
port your income before March 1, 1918,
will cost you dearly-for the penalty is
from $40 to $1,000 fine and in addition
fifty per cent of the tax due. If you
fail to give truthful answers to the
questions on the blank, the fine will not
exceed $4,000 or will not exceed one
years Imprisonment or both, in the dis
erection of the court. In case of sick
ness or absence from home you may get
an extension Of time by written applica-
in which must be stated the reasons
why the return cannot be rendered in
the time prescribed by law.
If you dodge the tax this year and
next, or for years to come, look out for,
the day Of reckoning when somebody
reports you and the government collects
all back taxes with the penalties Of five
per cent of the amount of tax due and
one per cent interest for each full
month during which the tax remains
unpaid. 1t is cheaper to pay every
year, and not try to dodge it.
Who Must Report Incomes?
Every unmarried person having net
income of $1,000 or more, and every
married person having a net income of
$4,000 or more in 1917, must report be-
fore March /, 1918, to the collector Of
internal revenue for the district in
which the tax payer resides. 1t is
necessary that you find out whether
you have an income that will make you
taxable under the new law. So you
better get out your pencil and do some
figuring.
The law defines income as profit,
gain, wages, salary, commissions,
money or it's equivalent from profess
sions, vocations, business, commerce,
trade rents, sales or dealings in prop
erty, real or personal, and interest from
investments except interest from gov
eminent bonds or any state, municipal,
township or county bonds. Income
from service as guardian, trustee or ex-
ecutor; from dividends, pensions, royal
ties, or patents, or oil and gas wells,
coal land, etc, and income from all
sources are taxable under the law, if
the net income from all sources come to
the sums named
It is going to be some task for a far
mer to find out what his income was
Few keep books, especially of the small
.,Tf ie 06
as sale if you take butter, eggs, apples,
potatoes or any product you have raised
to the store and "trade it out" for gro
ceries, wearing apparel, or what not
Living expenses cannot be deducted, 50
YOU must figure the value Of the farm
products traded for something, as tho
you sold the products for cash. 1t is
<1aething to the tax collector whether
you got cash Or sugar for the product.
The same is true Of real estate. If
you sold part or all Of the farm they
figure as profit or income the difference
between the cash value March 1, 1913,
and the price for which sold or the
difference between it's cost and selling
price if acquired on or after March 1,
1913. Rents are considered income
whether paid in cash or in part Of the
crop or otherwise.
What is Exempt? 49,
OF course there are exemptions. The
single person who is supporting de-
pendent children or dependent parents
or crippled relatives who cannot help
support themselves is considered the
head of family and has the same ex-
emption- $20O0-as married person.
Unmarried persons with incomes of
less than $1,000 and no dependents are
exempt from the tax. ..5 s.
Where husband and wife both have
they can report together and
claim one exemption, or report separ-
ately, and divide the one exemption
between them. In case they are di-
vorced or living apart, the one caring
for the children can claim full ex-
emption and the other only $1,000.
There is an exemption to the extent
of 5000 for each dependent child under
eighteen years Of age. Suppose your
net income figures up to $500 and you
have four dependent children under
eighteen years, you would be allowed
$500 deduction for them.
Other Exemptions.
There is certain depreciation in the
value of property which is exempt. 1t
runs as follows: five per cent on frame
buildings and two and half per cent a
year on brick or stone buildings; ten
\ per cent on the cost Of farm machinery
and implements. But this deduction