Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-03-09
Government Explains Method
Used in Paying Income Tax
Every Unmarried Person Who Earned 81, 900 or More
in 1913, and Married Persons Who Earned $4,000
or More, Must File Reports Before March Is.

full by March IS also will be well
coined on the ground that the gov
eminent needs the money.
A husband and wife whose com
bined net income for 1918 amounted
to $1,000 or more must file a return
either separately or jointly. If sep
arate returns are filed, either may
claim the personal exemption of
$1,000, or this exemption may be di-
vided. Earnings of dependent chill
dren must be included as part OF
the income of the head of the fam
lily.
IF an unmarried person Supports
either partially or wholly a parent
or some other relative or friend, not
living in the same household, this
person is not considered the head of
a family and is therefore entitled
only to the $1,000 exemption. If
the parent is wholly dependent.
however, and lives in the taxpayers
household, this makes the unmarried
person the head of the family"
If, because Of the special exemp-
tons for children and dependents
or because of the exemption of SOL
dier's and sailors pay, an unmarried
persons income of more than 81 900
or a married persons income of
more than $1,000 is found not to be
taxable, this condition does not free
the individual from filing a return.
Thus many persons who do not
have to pay tax must file returns.
The compensation in 1918 of
man in the military or naval service,
either as an enlisted man or an Of
icer, is wholly exempt from taxa
ton, provided this did not exceed
$500. Income of soldiers or sail
ors from private sources is taxable,
however, if it exceeds the exemp
tions -
Some Deductions Given.
The law provides for number of
deductions from gross income, and
these are of interest mainly to men
who make living out of business
enterprises. These allowable deduc
tons include the following items
Expenses paid or incurred during
1918 in carrying on any trade or
business, including rentals and a
reasonable 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 excessive
profits taxes and those assessed
against local benefits of kind tend
ing to improve the value of the prop
erty.
Losses in business or trade, if not
compensated for by insurance q
otherwise.
Losses in any transaction entered
into for profit in some side line OF
business.
Losses in Other Things.
Losses of property not connected
with the taxpayers regular business
if arising from fires, storms, or other
casualties, if not covered by insur
ance.
Worthless debts charged off dur
ing the year.
A reasonable allowance for depre-
citation of property used i'll business
or -uade.
A reasonable allowance for deple
ton as we'll as depreciation of prop
erty in the case of mines, oil and ga
wells and other natural deposits.
Contributions to concerns oper
ated exclusively for charitable, re
ligious, educational or scientific pur
poses, not in excess of IS per cent
of the taxpayers net income.
Amortization on buildings, ma
chinery, equipment or other facili
ties constructed or acquired for the
production of articles contributing to
the prosecution of the war.
Need Not Include These.
The following items are exemp.
from taxation and need not be in
cluded in the returns:
Proceeds of life insurance policies
returns of premium on life endoW
ment and annuity policies, gifts, be
quests or inheritances (income from
gifts is taxable, however), interest
on bonds of any state, county or
municipality, interest on farm loan
bonds, interest on $4,000 or less of
Liberty bonds, and on larger
amounts in certain cases provided
by the bond act, payments on ac-
count of accident or health insurance
or under workman's compensation
acts.
May Be Named U. S. Minister.
London, March 8.-H. A. L