The Churchill county standard. (Fallon, Nev.) 1908-1920, 1919-02-26
new INCOME TAX LAW
EXPLAINED BY COLLECTOR
Single Persons With Net Income of
$1,000 or Over Must Pay; Married
Men Allowed $1,000 Exemr son

agreement by the Senate House con-
ference committee, we're givn by Col
lector of Internal Revenue Justus S.
Wardell
1t is expected that the bill will be
adopted by the Senate this week, and
be ready for the signature of the
President on his return.
Who must file an income tax re-
turn under the new law?
Every person having a net income
during the year 1918 of $1,000 o.
over if single. and If married $4,000
or over
When must the income tax return
be filed?
On or before the 18th day of
March.
Does payment of the tax have to
be made at the time the return Is
filed7
One-quarter of the amount of the
tax must be paid when the return Is
made and the balance in three in
stallments. on June Is, Septembe-
l 5 and December 15.
Upon what is the tax based?
The tax is based on the net In
come of the taxpayer, which is ascer-
tanned by suhtracting from the gross
income the deductions allowed by
the law.
What is a gross income?
All gains. profits and increases
from whatever source derived, but
not including exempt income"
What is exempt income?
Exempt income is all proceeds
from life insurance policies, all
property acquired by gift or inheri-
tance. all interest received from
bonds issued by a State or POLITICAL
subdivision thereof, securities issued
under the Federal loan act and
bonds of the United States issued
prior to 1917. The income from
these securities must be below a GER
tain amount fixed by the ass to Sc
cure the exemption.
Other exemptions are amounts re-
ceived from accident and health in
surance. or under the workmen's
compensation acts, and the amount
of any damages received as result
OF such injuries. Amounts received
for actual service during the war are
also exempt.
Are the salaries of State and mu-
nicipal employees exempt?
In the bill as passed by the House
they were taxed. but this was elimi-
mated BY the Senate. and the confer
ence committee abided by the decis-
ion of the Senate.
Can a taxpayer deduct his living
expenses?
No. The deductions allowed
single person of $1,000. married
person of $4,000 and the $500 dedue-
tion for each dependent child or per-
son physically or mentally incapaci-
tated are permitted for the purpose
of covering such expenses.
Can worthless debts be deducted?
Yes, II they are ascertained to be
uncollectable, and are charged off by
the taxpayer.
Can losses sustained in channels
other than in occupation and trade
be deducted?
Under the old law they were per
mitted only up to amount of the prof
II or gain The new law permits de-
ductions up to the full amount OF
the losses.
Can taxes be deducted?
City and State taxes can be de-
Quoted, except such taxes as apprec-
late the value of the property. For
example, the Twin Peaks tunnel tax
could not be deducted.
Can the interest on mortgages be
deductedg
Yes. Interest paid of all kinds is
deducted under the new law, with
the exception of interest on loans for
the purpose of acquiring United
States obligations or other tax free
securities.
What is the change In the amount
of the tax on incomes?
The new law fixes the normal tax
on individual. incomes at IL per cent,
but It is reduced to per cent for
the first $4,000 In excess of the cred
its. For example, married man,
without children, with an income OF
$4,000, would be allowed credit OF
$1,000. and on the remaining $4,000
he would only have to pay a normal
tax OF 6 per cent. or $240. On an in
come of $1,000. with $4,000 credit,
leaving net income of $4,000, he
would have TO pay a normal tax of
- per cent on the additional $1,000,
or s120, making his total income tax
s3G0.
What is a surtax2
The surtax is an additional tax at
graduated rates upon all incomes in
excess of $4,000 For example,