The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-02-14
CHANGES MADE
IN new INCOME
TAXATION Bill
individuals Have Same Trou-
bic as Last Year in Their
Reports.

A number Of changes are apparent
In the new income and excess profits
tax laws. but despite the changes the
man who pays 1t is evidently going
to have the same difficulty in arriv-
Ing at an understanding of what he
owes the government as he did last
year.
Under the new law single man
with an income Of $1,000 or less 10
exempt. A married man with an In
come OF $4,000 or less Is also exempt.
and there Is a further exemption OF
5000 for each child under Is years old.
The rate on the first $4,000 OF nor.
NAL tax Is per cent and all above
that amount is IL per cent.
Surtax starts at $1,000 at the rate
OF 1 per cent up to $4,000. On each
$4,000 above the latter amount per
cent Is added. When the income Is
100000 the surtax reaches 4S per
cent.
Distribute Blanks Soon
Within a few days blanks for In
dividuals whose net income is less
than $4,000 will be received in Rich
mond. They will be mailed out as
soon as possible. Blanks for indi.
viduals whose net incomes exceed So
900 have not been printed and 1t may
be several weeks before they arrive.
Individuals are not subject to ex-
cess profits tax Partnerships are in
the same category. Last year they
were subject to such tax.
Partnerships are required to make
a return showing their net incomes
for information purposes only.
Corporations have an exemption or
two 70 10 "a G.
sessed. All net incomes in excess OF
that amount are taxed IL per cent.
Personal service corporations, such
as Incorporated firms of lawyers and
commission corporations and others
whose income is derived from personal
efforts of officers and stockholders and
whose invested capital is not mate
rial income producer, are not subject
TO income tax as corporations. Each
officer and stakeholder must pay both
normal and surtax of his pro rata
share of the profits Of the corpora
ton.
Basis Of Profits Tax
The Excess Profits" tax has been
materially changed and is now called
the War Profits and Excess Profits
Tax"
It provides: !,
First, that between the deduction al
lowed and 20 per cent OF invested
capital the tax will be 30 per cent
Second, above 20 per cent OF invested
capital the tax is 65 per cent. Third
the difference between the sum on the
first" and second provisions anc
80 per cent of the net income. less
the deductions allowed under the wal
profits method.
There are many favorable features
in the new law to protect the sinai
corporations from the Injustice tina
heavy taxation would entail.
There is a provision for making con
solidated returns where corporation:
are interlocked, or where the same
stock holders own practically all TIT
stock of different concerns.
The law provides that one-fourth 0
the tax must be paid at time return
Is filed with the collector; one fourtl
on June Is, one-fourth September i
and the final ono-fourth December Ia
If preferred, individuals and corpora
lions can pay the entire amount
the time the return is filed.
Blanks which corporations Will us
in making returns to date have no
been printed. However, they are be
ing made ready for the printers nov
and will soon be in the hands OF TN
collectors. They will be malleu a
once to Interpretations who will max
returns on the calendar year basis az
cided upon, no matter what date the
NAV receive the blanks.