Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1919-02-24

may not be. made for personal, family
or living expenses.
Deductions Allowed.
The law does provide for number
of deductions, however, from gross
income, and these are of interest
mainly to men who made Il living out
of business enterprises. These allow
able reductions include the following
items:
Expenses paid or incurred during
1918 in carrying on any trade or busi-
ness, including rentals and a reason
able allowance for salaries.
Interest paid or accrued in 1918,
except on indebtedness incurred for
the purchase Of tax-eXempt stocks or
bonds
Taxes paid or accrued except in
come, war profits and excess profits
taxes and those assessed against LOCAL
benefits of a kind tending TO improve
the value of the property.
Losses in business or trade, If not
compensated for by insurance or
otherwise
Losses in any transaction entered
into for profit in some side-line of
business.
Losses of property not connected
with the taxpayers regular business
if arising from fires. storms or other
casualties, if not covered by insurance.
Worthless debt charged off during
the year
A reasonable allowance for depre-
citation of property used in business or
trade.
A reasonable allowance for deple-
ton as we'll as depl recitation of prop
erty in the case of mines, oil and gas
wells and other natural deposits.
Contributions to concerns operated
exclusively for charitable, religious,
educational or scientific purposes, not
in excess of Is per cent of the tax
payers net income.
Amortization on buildings, machin-
cry, equipment or other facilities con-
structed or acquired for the produce
ton of articles contributing to the
prosecution of the war.
The preceding items must be re-
ported IN the return and Deducted ac-
cording to the method set forth in the
return blank form.
The following items are exempt
from taxation and need not he in
cluded in the returns;
Proceeds of life insurance policies,
returns of premium on life endow-
ment and annuity policies; gifts, be-
quests or inherltaaces Gncome from
gifts taxable, however,; interest on
bonds of any state, county or munich
patty; interest on farm loan bonds;
interest on 5000 or less of Liberty
Bonds, and on larger amounts in GER
tain cases provided by the bond act;
payments on account of accident or
4 ,.Iy
compensation acts.
To detect inaccuracies or fraud in
returns the internal revenue bureau
has instituted system OF checking
returns with other reports required
from all persons or interests which
paid out 1000 or more to any indi-
vdual during the year. The latter re-
ports constitute the tax collecting ma
chinery's information at the source"
which proved so valuable last year in
preventing tax dodging.
In addition to income taxes there
is multiplicity of other taxes to be
assessed this year. Incorporated bus
inesses are required to pay taxes on
net inc ONES at the rate of IL per cent,
with an exemption of $4,000. War
profits and excess profits taxes are
assessed against corporations only.
The revenue bureau has made a
provision for accepting tentative esti-
mates of income in cases where tax
payers are not able to figure accurate
ly their incomes before March Is. In
these cases., however, an installment
payment of None-fourth or the esti-
mated amount is required on that date
and tax officials will guard against
any attempt to evade or minimize the
tax payment then through setting an
unreasonably low estimate.