The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1920-01-26
INCOME TAX
Some Facts That People Who
VIII Have to Pay Will Want
to Know Are Given by
Officials.

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 a business,
trade, or profession.
A merchant may claim as deduc-
lions the amount paid for advertising,
hire OF clerks, and other employees,
the cost OF light, fuel, heat, water, and
telephone used in his place Of bust
ness, the cost of operating delivery
wagons, motor trucks, and incidental
repairs Of such vehicles.
A physician may claim as deduc-
lions the cost of medicines and medi-
cinal supplies used by him in his
practice, reasonable proportion of
the expenses paid in the maintenance
and repair of an automobile used in
making professional calls. the eX-
penses of attending medical conven-
tions, dues to medical societies and
to medical journals, the
rent paid for office rooms and the cost
OF heat, water, light, telephone, ETC.,
used in such office rooms, and salar.
les paid to office assistants. The
same deductions are allowed a dem
tist.-
Farmers Also Considered.
The farmer may deduct all amounts
paid in preparing his land for a crop,
and the cultivation, harvesting, and
of the crop. The cost Of
seed and fertilizer used and amounts
spent in caring for live stock are de-
ductible items. The cost of minor re-
RI, n Inc ba
dwelling, and of fences, farm ma
and wagons may be claimed
also the cost of farm tools which are
used up in the course of year or two.
The cost OF machinery of permanent
such as a thrashing ma
chine or tractor, is held to be CAPT
al investment, and is not an allow
able deduction. Rent paid for farm
IS deductible.
The principles underlying these al
owances are equally applicable to the
conduct of any trade, business, or pro-
'ession. In short. all expenses con-
lected solely and directly with the
conduct of an income-producing bust
less, trade. profession, or vocation are
Deductions For Losses.
Losses incurred by a taxpayer in
my transaction entered into for profit
outside of his regular business are al
owed. Under the 1917 act deductions
or such losses we're allowed only to
he extent of gains in similar trans
lotions. If, for, example, a person
made $1,000 in one stock market
ot irr, in :
he was required to include the $1,000
n his return of gross income, and
ould deduct only that amount as
oss. Under the current act he is al
owed deduction of $4,000
"A reasonable allowance is made for
depreciation of business properly ind
'bsolescence. and for the depletion CT
vi and gas wells and other natural
deposits.
Contributions or gifts made during
he year 1919 to corporations organ
zed for charitable, scientific, reli-
ious, or educational purposes, Of for
he prevention of cruelty to animals
r to the special fund for vocational
may be deducted TO an
IN CUNT not exceeding Is per cent Of
he taxpayers income.
Other DeductibIe Items.
Other items which may be deducted
re as follows:
Taxes paid or accrued during The
ear 1919, except income, war pro!tts,
r profit taxes, and those as
essed against local benefits Of a kind
ending to improve the value Of The
roperty.
Loss of property not connected with
'ade or business rising from fires,
forms, shipwreck, or other casualty,
r from theft, ii not compensated for
Y insurance or otherwise
Debts ascertained to be worthless
nd charged off within the year.
Interest paid or accrued on indebt-
1ness except Indebtedness incurred
, purchase securities, the interest
non which i; eyaninf from, TOW