The Barre daily times. (Barre, Vt.) 1897-1959, 1921-01-26
INCOME TAX DEDUCTION.
of the Items Which are
Allowed by Government.

taxpayers are found in the income ta'
returns. Deductible items are omit
ted and other items which are not de
ductible are included. Deductions tol
business expenses are the principal de
ductions allowed, the law expressly
prohibiting deductions for personal
| living or family expenses.
The revenue act provides that II
computing net income there shall be
allowed as deductions from gross in
come all the ordinary and necessary
expenses paid or incurred in the tax.
able year in carrying on any trade
7 business, profession or vocation Typi.
cal expenses of a mercantile establish
ment are amounts paid for advertis-
! ing, hire or clerks and other employees,
rent. light, heat and water, telephone
insurance, delivery. expenses, the cost
OF operating delivery wagons and mo-
tor trucks. and incidental repairs 20
| such vehicles The expenses of man
ufacturing business include labor, raw
materials, supplies, repairs, light and
heat power, selling cost, administra-
ton and similar charges.
Professional Men.
A professional man may claim as de-
auctions the cost of supplies used by
him in his practice, expenses paid in
the operation and repair of an automo-
bile used in making professional calls
dues to professional societies and sub
seriptions to professional journals, Of
fee rent, the expense of fuel, light,
water and telephone used in such Of
fees, and the hire and assistants.
A travelling man, working on salary
or commission, IS allowed to deduct
certain business expenses. Reasonable
and necessary travelling expenses in
clude railroad fares and meals and
lodging. A travelling man working on
salary without reimbursement for
travelling expenses, or employed on a
commission basis with no expense al
lowance, may deduct his expenses for
railroad fare. and also his expenses for
meals and lodging in an amount in ex-
cess of the ordinary cost of such liv
ing expense when at home
If he receives salary and is repaid
his actual travelling expenses, he must
include as gross income an amount
equal to the ordinary expense for
meals and lodging when at home, as
such amount is held to be additional
70 tho taxpayer Pay
ment for the use Of a sample room for
the display Of goods is a business ex-
pense
Erroneous Claims.
The farmer NAV deduct all amounts Z
Maid in the production. harvesting and .
marketing Of crops, including labor.
cost of seed and fertilizer used cost [
Of minor repairs to farm buildings
(other than the dwelling, fences, and
and Of small tools, which
are used up in the course OF the year.
Taxpayers frequently make the mis-
take OF claiming as deduction expen
iitures for articles more or less per
nanent in character or for permanent
Of their property. In the
,ase Of the business man they include
,laims for the erection Of new build
ngs or installation Of machinery. A
farmer claims as a deduction the cost
Il new thrashinc machine or tractor
" the expense Of putting a new roof
m his barn Such deductions are ex
,rpsslv disallowed by the revenue act
md are held to be investments Of
apitsL
Allowances for Losses
Allowable deductions. in addition 10
business expenses. include losses sus-
aimed By the taxpayer in any trans
ction entered into for profit outside
I his regular business.
A reasonable allowance is made for |
he depreciation Of business property. Il
obsolescence, and for the de-
lction Of oil and gas and other natural
eposits.
Contributions made during the year
300 "a corporations organized exclu- II
ivelv for charitable. scientific. rcl y
ious or educational purposes. OF for the
revention u cruelty to children or an Il
mails. OF the special fund for yoca [
onal rehabilitation. NAV be deducted :
b an amount not exceeding - per cent
T the taxpayer income. computed
ifhouf the benefit 81 this deduit on
other items which NAV be deducted
Re- q follows:
Taxes paid or accrued during the
ear 1920, except income. war profits
/ excess profits taxes. and thnsr as
'ssed against local benefits ~ kind
'nding 70 improve the value ~ the
lxpaver's property.
losses ~ property not connected
ith trade Or business arising from
-cs or other casualties. or from theft
NOT compensated Tor hv insurance.
Debts ascsrtained t. - WORTHLESS
IA charged "A within tba vear l020
Interest paid - arrue1 % ind htrs
Sc exert interest incurred Dry
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