The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1920-01-14
INCOME TAX FACTS
YoU SHOULD KNOW


Deductions from gross income in
determining net income include all
business expenses, which are the
amounts actually incurred during the
tax year in the conduct of business
trade or profession.
A merchant may claim as deduc-
tions the amount paid for adveTtis-
ing, hire Of clerks, and ether employ
,es, the. cost Of light, fuel, heat, wa
.er, and telephone used in his place
,f.bus:ness, the cost of. operating de-
livery wagons, motor trucks, and III
;dental repairs to. such vehicles.
< physican may claim as deductions
he cost Of medicines and medicinal
supplies used By him in his practice.
l reasonable proportion OF the ea-
penses paid in thc>ma maintenance and
..epair Of an automobile used in max.
ng professional calls, the expenses OF
attending medical conventions, dues
0 medical societies and snbscrip-
ions to medical journals, the. rent
,aid for office rooms and the cost OF
neat. water, light, telephone, etc.
!sed in such Office rooms, and salaries
3aid to Office assistants. The sam {.
reductions arc allowed 4 dentist.
Farmers Also Considered
The farmer may deduct all amounts
aid in preparing his land for crop.
md the cultivation harvesting, and,
n1rketing Of the crop. The cost Of
seed and fertilizer used and amounts
spent - caring for live stock ar.' dc
!uct :t,rls. The cost of minor
repairs to farm buildings. other than
the dwelling, and Of fences, farm ma ma:
.hinery, and wagons may be claimed
also the cost OF farm tools. ~hich are
lsed up in the course Of a year or
rwo. :. The cost Of machinery OF
'erInanent, charcter, such as
.hrashing machine or tractor, is he1G
to be a capital investment and is not
an allowable deduction. Rent PAID
for farm is dcductible.
The principles Underlying these al
lowances arc equally applicable to th-
conduct Of any trade, business. or pro-
fession. II short, all Expenses con
nected solely and directly with the
conduct of an incone-producing bus
mess, trade >or profession, o. yoca-
ton are allowable.
Losses incurred by taxpayer in
any transaction entered into for
profit outside Of his regular business
are allowed. Under the 1917 act de-
difctions for such losses were allowed
only to the extent Of gains in Similar
transactions. If. for example, a per
son made $1,000 in one. stock mar.
ke4 transaction and in another. lost
$4,000 he was required to include the
$1,000 in his: return of gross income,
ana could deduct only that amount
rs a loss. Under the current act
he is allowed a deduction OF $4,000.
depreciation Of business property and
obsolescence, and for the depletion
OF oil and gas wells and other natural
deposits.
Contributions or gifts made during
the year 1919 to corporations organ
xed for charitable, scientific, relig-
;ous, or educational purposes: or for
he prevention OF cruelty to animals
.nr to the special fund for vocational
rehabilitation may be deucted to an
.,nsent not exceeding. IS per cent ef
the taxpayer's income.
Other De.luctible Items.
Other items which may be deduct
ed are rs follows:
Taxes paid or accrued during the
wear 1919; except income, war. prof
its. or excess profit taxes, and those
assessed against local benefits OF a
kind tending to Improve the. value Of
the property.
Loss of property not connected. with
.cade or business rising from fires,
owns, +shipwreek, or. other casualty,
or from theft, if; not compensated for
by Insurance. or otherwise:
Debts ascertained to be worthless
and charged, off within the year.
Interest paid or accrued on iadebt-
edness except Indebtedness incurred
to purchase securities, the interest
upon which is EXEMPT from tax.