The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1918-03-27
FEDERAL INCOME
TAX IN BRIEF
The Requirements Boiled Down
for Busy Folks.

lux uut may De puiu INV VI "' w
before June IS, 1918.
II you were single and your net In
come for 1917 was $1,000 or more you
must file return.
II you were married and living with
wife Cor husband) and had net in
come of $1,000 or more for 1917 you
must file return.
Husbands and wlfe's income must
be considered jointly, plus income of
minor children.
Income of a minor or incompetent,
derived from separate estate, must
be reported by his legal representa-
tive.
Severe penalties are provided for
those who neglect or evade the law.
For false or fraudulent return there
is a penalty not exceeding $1,000 fine
or years Imprisonment, or both, plus
100 per cent. of tax.
For failure to make return on or
before April 1, 1913, fine is from $50
to $1,000, plus so per cent. of tax due.
Returns must be filed with the Col
lector of Internal Revenue of district
in which you live.
An agent may file return for a per
son who is ILL., absent from the country
or otherwise incapacitated.
Each return must be signed and
sworn or affirmed by person execut-
ing 1t.
Single persons are allowed $1,000
exemption in computing normal tax.
married person living with wife
Cor husband) is allowed $1,000 exemp-
ton, plus 5000 for each dependent
child under IS.
head of family, though single, Is
allowed $1,000 exemption If actually
supporting one or more relatives.
Returns musC show the entire
amount of earnings, gains and profits
received during the year.
Officials and employees are not taxa
BILE on the salaries or wages received
from a state, county, city or town in
the United States.
Interest on state and municipal
bonds issued within the U. S. is ex-
empt from federal income tax and
should be omitted.
Interest on United States govern
ment bonds is also exempt, except on
individual holdings of Liberty Fours in
excess of $1,000 par value.
Dividends are not subject to normal
tax, but must be reported and included
in net income.
Gifts and legacies are not income
and should not be included on the re-
turn of the beneficiary.
Life insurance received as bene-
ficiary or as premiums paid back at
maturity or surrender of policy is not
income
Payments received for real or per-
sonal property sold is not income, but
the profit realized thereon is income
for the year of sale.
Amounts received in payment of
the interest on such notes or mort
cages is taxable income.
From the entire gross income GER
tain allowances are made in arriving
at the net income.
Necessary expenses actually paid In
the conduct of business, trade or pro-
fession may be claimed.
farmer can claim payments for
labor, seed, fertilizer, stock feed, re-
pairs on buildings, except his dwelling;
repairs of fences and farm machinery,
materials and small tools for immedI-
ate use
The amount of rent paid for farm
may also be claimed as q tenant farm
er's expense.
Payments for i've stock are allowa-
hle If Fought for resale. But If bought
for breeding purposes cattle are an in
vestment, not an expense, and cannot
be allowed.
A stOrekeeper can claim amounts
paid for advertising. clerk hire, tele-
phone. water, light and fuel. also dray-
age and freight bills and cost of Op-
Grating and repairing wagons and
trucks.
A physician can claim cost of his
professional supplies, rent, Office help,
telephone, expense of team or autOmo-
bile used In making professional calls
and expenses attending medical con-
ventions.
A dentist can claim similar items,
except team or auto expense, which
are not necessary In his profession.
Expenses that are personal or con-
nected In any way with the support or
well being of person or family are
NOT allowable
The costs of machines, Instruments,
vehicles or implements that are more
or less permanent In character are not
allowable as an expense. They are in
vestments.
Interest paid on a mortgage or other
personal Indebtedness Is allowable on
a personal return.
All taxes paid within the year can
be taken out on a federal return, ex-
cept federal income taxes, Inheritance
taxes and assessments for local i'm
provements.
Losses sustained In business or
through fire, storm or shlpwreck or by