The Cook County news-herald. [volume] (Grand Marais, Cook County, Minn.) 1909-current, 1919-02-05


rG isdgedp previously aehno" Tvs $50. 81
AoIal .........:-. ....$ 4O3 %
cost Of the annuity. Dividends or
unexpired life insurance policies are
not taxable income; but dividends on
paidup policies must be considered
income. Alimony is not income to
the recipient, nor is it an allowable
deduction on the part of the person
who pays.
From the total of all items of
income, there are certain deductions
allowable by law. All interest paid
on personal indebtedness and all tax
IS paid during the year are deduct
IDLE, except Federal Income and Ex-
cess Profits taxes, inheritance taxes
and assessments for local improve
ments, such as sidewalks, sewers,
etc. Losses incurred in business or
trade are allowable. also losses aris-
ing from fires, storms, shipwreck or
other casualty, or from theft I'M
cases in where such losses are not
compensated for by insurance or
otherwise. Losses incurred outside
Of persons regular business are al
:oWable to the extent of gains re-
ported from similar transactions
within the year. Debts due to the
taxpayer actually ascertained to be
worthless during the year are de-
luctible.
::Depreciation on property used in
profession, in business, or in farm
ng is another item that may he
claimed as a. deduction. The store
keeper may claim depreciation on
us fixtures, and on his delivery hor-
es and wagons, but not on his stock
held for sale. The professional man
nay claim similar deduction on his
Instruments; and, in the case of a
physician w no maintains a. team or
auto for making his calls on pa
TENTS, reasonable depreciation NAV
De claimed. The farmer may claim
depreciation on his farm buildings,
aside from his PERSONAL residence.
also on his farm machinery, his work
horses and farm work wagons. The
heory of depreciation, in connection
with the Income Tax, is that wear
md tear caused by use in earning
income is a real expense in the earn
'ng Of that income. The rate is de-
termined by the number Of years
that the property ordinarily would
oe useful, and the cost of the prop
erty is the basis of the computation.
If the property suffering deprecia-
lion was bought or acquired prior to
March l, 1913 the market value as
of that date is used, instead of the
lost in figuring depreciation.
contributions or gifts actually
made in 1918 to organizations oper-
ating exclusively for religious, chart
table, scientific or education purpo-
'es, and to societies for the pre-
.'ention of cruelty to children or ami
mails, may be deducted, to- an amount
not exceeding Is per cent of the net
income computed without the bene-
it of this deduction.
AFTER the total of all income is
found, and the deductions allowable
by law have been computed as an off
set, the amount of income in excess
Of such deductions is the net income
which forms the basis of the assess
ment of tax.
IF every person in this district
will examine his own 1918 income
and his allowable deductions, in line
with data that 1 have given, he will
know beyond doubt whether he must
ile his return when the blanks ar
rive. And here is how he will de-
termine his liability to file a return.
If he is single he must file if his net
income was $1,000 or, more, and this
requirement is enforced whether or
not he is the head Of a family. If he
is married, he must file his return if
his net income, including that Of his
wife and minor children, was $1,000
or more. es, &C. &. cs s. + r. - -
II want to emphasize. the coopera-
ton feature Of the collection Of
the Income Tax this year. The policy
Of the Internal Revenue Bureau is
to aid taxpayers to- meet the require
ments Of the law. We are going