The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-02-25
Failure to Return Income Tax
Papers May Lead to Trouble
March 18th Is Last Day Upon Which Taxes May Be Paid
Without Penalty.

OF the amount Of the net income be-
tween $4,000 and $1,000 to sixty-five
per cent of the amount by which the
net income exceeds 81 100000.
( The single man with net income
/ for 1918 of $4,000 will pay this year
q tax Of $50, the man with an income
OF $4,000 VIII pay $40 the $4,000
man will pay $3.50 and the $4,000 man
will pay s240. all at the rate of SIX
/ per cent on his net income above his
personal exemption Of $1,000. The
single man with an income for 1918
! OF $1,000 Will pay 1870. He is taxed
at the rate of six per cent on his frs:
$4,000 above the exemption and at
twelve per cent on the remaining
goo, "a total OF $3.50. In addition
/ he pays a surtax of $40. one per cent
/ of the amount of his income between
5000 and 5000.
! The married man will pay $40 on
net income of s2,5oo in excess OF
his personal exemption. $50 on a
$4,000 income. $500 on a $4,000 in
come, $3.50 on a $4,000 income and
$3.50 on a $4,000 income, which in
cludes his surtax Of $40.
These figures are based on .he in
come taxpayers without Siepcndent,
other than husband or wife. The tax
payer is allowed, In addition to his
personal exemption OF 5000 for each
person dependent upon for chief sup
port, If such persons is under eighteen
years of age or inca pabie of self sup
port Under the 1917 act the $500
exemption was allowed only for each
dependent "child' OF The person max
ing the return. or. In the case of
head Of a family. for each dependent
child OF the family A head Of
farhy~~one who supports one or
fore persons closely connected with
him by blood relationship. relation
ship by marriage or by adoption--~is
entitled to all the exemptions granted
Il married person.
/ Must BE Specific.
i In his return tho taxpayer Is re-
quired to state specifically each item
OF gross income, Gross income IS
defined AS gains. profits and income
derived from salaries, wages or com
pensaIon for personal service OF
whatever Kind and In whatever from
paid. or tram professions, voCauons.
trade, business, commerce, or sales
or dealings in property, whether real
or personal, growing out of the own
ership or use of such property: also
from interest. rent. ridenas, securi
tlas or the transaction of any bus
mess on for gain or profit, or gains
ior profits, and income derived from
any source whatever.
4 Net income upon which the tax is
a@sessed, is gross income less certain
deductions which are more liberal
tthan under the preceding act. They
Include the following items:
i, Expenses paid or incurred during
, the taxable year in carrying on any
, trade or business including rentals
and a reasonable allowance for sal
aries
Interest paid for accrued during the
year l9l8 except on Indebtedness in
Cured for the purchase Of tax~excmpt
sued ny the United states after Sep
TENDER "a. i94L
a Taxes paid or accrued. except in
u Gonses uasr.spratits >asaa, ossesa+s profits
taxes. and those assessed against local
, benefits Of a kind tending to improve
, the value of the property.
Losses IN business or trade. II not
! compensated far by insurance on
2 otherWi. e.
l. sses in any transaction entered
, into Tor profit not connected with
r Inc regular business Of the taxpayer.
Losses sustained by loss Of property
: mot connected with tho business OF the
, taxpayer if arising from tircs, storms.
Shipwreck or other casualty. and il
, not compensated for by insurance.
Debts ascertained To he worthless
r year.
: Amortization ON buildings. rnachin
cry. equipment or other facilities CON
= struCted or acquired for the produc-
ton OF articles contributing to the
prosecution Of the war.
reasonable aiiowencc for depre~
citation OF properly uscd in business
or trade.
A reasonable allowance for deple-
st in
the case OF mines, oil and was wells
land other natural deposits
Contributions TO corporations ope~
rated exclusively for charitable. re-
4 Mgieus. .sdncatsonal,, or scientific pur-
poses or for the prevention OF cruelty
to children or animals not in excess Of
Is per cent OF the taxpayers net in
come computed without the benefit of
this deduction.
The Changes.
The foregoing deductions show sew
eral important changes in the tax pol
icy Of preceding years. Probably the
i, most important la the provision allow
ing deductions for losses sustained in
transactions outside of the Taxpayers
regular line Of business business
man who "dabbed in stocks and in
one transaction lost $4,000 and in
another made $4,000, was required. I'M
der the 1917 act, to include the $4,000
In his return of gross income, and
could claim only that amount as a de-
duction, Under the current act, he is
allowed TO claim n deduction OF $4,000.
Deductions cannot be made for per-
sonal. family or living expenses
The following Items are exempt from
taxation under the current act, and
need not be included In the return:
Proceeds of life insurance policies.
Returns of premiums on life en1ow-
ment and annuity policies
Value of property acquired hy gift.
bequest or Inheritance. 1t must be UNI
derstood. however, that the income de-
rived from such property Is taxable
and should be included under gross in
come
) Interest on bonds and other obliga-
tons OF any state or territory or any
subdivision OF state or territory. such
as city. town. county or village, and