South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-02-25
March - Is Last Day Taxes
May BE Filed Heavy Pen
aItv for Failure 10 Do So.


IS the date is rapidly approach
ae upon which an income tax re-
ports must be filed. it is important
aa- all farmers understand now
r.- should Sc cone. March Is Is
f.e last day that reports may be
f.ed. after that time a person who
fals 20 Ale his or her report is sub
Iar- 90 a heavy fine
The new act requires that returns
shall be fled by every single per-
sor--the term including widows.
.dowers and persons not living
with husband or wife-wh0se net
income for the year 1921 was ST.
GOO or more. or whose gross income
MAS $1,000 or more. and by every
married person living with husband
rr wife whose net income was 81
600 or more. or whose gross income
was $4,000 or more.
What T. Net Income?
Set income" is gross income.
cess certain specified deductions,
which are more liberal than were
provided bv ,he revenue ACT ~ 1918.
1r gross income. the farmer is re-
oured 20 include "all grains profits
or income derived from the sale or
exchange Of farm products. whether
produced on the farm or purchased
and resoId The requirements 20
fle = return OF gross income re-
Eardless OF the amount OF net in
come. IS a new provision or law.
- "a hrr- frrn A.
oquaued or exceeded $4,000. returns
must be filed 10y single persons II
The net income equaued or exceeded
$1,000. and 10y married persons II
the net income equalled or exceed
Cd $4,000. Iu computing the net
income or married persons the
earnings or other income of depend
ent minor children must be in
c.uded.
Exemptions Allowed
The exemptions are $1,000 for
single persons. $500 for married
persons and heads OF families whose
not income for 1921 was $4,000 or
or Iess and $4,000 for married per
sons and heads of families whose
income was in excess of $4,000.
Under the revenue act Of 1918. the
exemption allowed such persons
was $4,000. regardless OF the
amount of net income. A person
who supports fin one household one
ol more relatives Cotner than wife
or husband) IS the head OF a family.
The tax rates for 1921 are un-
cha nged-four per cent on the first
$4,000 Of net income above the ex-
emption and eight per cent on the
remaining net income. The exemp-
fiou for dependents person de-
pendent upon the taxpayer for chief
support who is under is years OF
age or mentally or physically IN
caDaCitated-is increased from 5000
90 $500 Thus. a married man with
three children under rs years of age
whose income for 1921 was $4,000.
is entitled TO an exemption OF So
ZOO The exemption allowed such
man for the year 1920 was 80 500.
Deductions Allowed Farmers.
AIT necessary expenses incurred
during the year 1921 in the opera
tom of a farm as a business enter
prise. are deduCtible items. These
include harvesting and marketing
OF crops and the cost or seed and
fortified used Amounts expended
fo- the cost of feed for livestock
may be claimed. but the value of a
farmers own products used for
such purposes is not n deductible
item The farmer may deduct the
cost OF farm tools used in tEe course
of a year. wages paid 90 employees
lother than domestic servants and
rent paid for farm lands and build
fngS totber than dwcllinE) cost Of
repairs 20 fences and 90 wagons and
machinery. also bills paid FOR horse
shoeing. stock powders. rock salt
veterinary service. insurance eek
cept on the dweIung) gasoline FOR
operating power and sundry minor
expenses.
What Are Dcductfble Expenses.
The cost Of farm machinery Of a
permanent character. such as
threshinC machine or tractor and
extensive repairs 90 farm buildings
such as placing a new roof on the
barn are not deductible expenses
These are rcEa~ded as capital IN
VeStmcuts. made Tor the purpose OF
improving the property and en-
HANGING its value. Amounts ex
pended iu the developments OF
farms. orchards and ranches prior
r1 the time when the productive
state was reached. may be regarded
rs investments OF capital also
amounts expended for the purcha sc
~ breeding or dairy animals. Th'
purchase price Of on automobile
even when wholly ueed in carrying
ur farming operations. is not de
Guc-ble but is regarded as an en-
V,s-meut OF capital The cost O.
gasoline. repairs and upkoep OF al
lutomobIe is used wholly in IN,
business Of farming. is deductbIt
as an expense. ~ used partly 90,
business purposes and partly for the
pleasure or convenience Of the tax.
payer or his family. such cost may
bc apportioned according 20 the ex
tent ~ such use Only The proper
SION Of cost attributable 20 business
dedEctible as a necessary expense
How Gross Profits Are Obtained.
The gross profits are obtained by
adding 90 the inventory value OF live
sock and farm products on hand a
-re end Of the wear. amounts re-
eivcd from The sale OF the stool
ara products and other misceIlane
..s receipts during the year ant
.sductug from this sum the IN
..rtory value Of stock on hand a
-as beginning OF the wear. plus tn
..-t ~ stock and prduCe purchased
during the year As an illustration
.t the difference between the re
.Dts and disbursements basis ant