The Waterbury Democrat., 1939-02-24
Your Income Tax
No. 20 DEDUCTION FOR TAXES


 Taxes on real estate and per- sonal property paid during the year 1898 are deductible. so-called taxes which are assessed against local benefits, such as streets, sidc- walks, drainage, and other like Improvements, are not deductible but are to be capitalized, as they tend to increase the value of the property and thus constitute cost Of c permanent improvement. The Federal income tax may not be deducted. The tax on unjust en- richment-a federal tax on i1- come-is not deductible. Income tax, however, paid to the state by an individual on his income is an allowable deducation in his federal i1cof1e-taX return.
 Customs duties paid by a person on articles imported for his own use are deductible. Import or tariff duties paid to customs of- ficers; and business, license, priyi- lege, excise, and stamp taxes paid to internal revenue collectors are deductible as taxes, providned they are not added to and made q part of the expenses Of the business or the cost Of the articles Of mer- chandise with respect to which they are paid. iri which case they cannot be deducted separately as 8 tax. 4 federal tax is imposed Of cent for each 10 cents Or frac- ton thereof of an amount paid for admission to any placed where the amount paid is 4i cents or fiore) and is deductible, provided afl account has been kept by the taxpayer Of the amount paid. Taxes on club dues are deduct ible by the member paying them. An Individual may deduct the tax on his telephone conversa- tons, radio messages, telegrar1s, and cables, and on the rent Of his safe-deposit box.
 Unemployment compensation contributions, if officially classified as taxes, are deductble as taxes and not as business expenses.
 The income tax imposed upon employees by section eO1 Of the Social Security Act may not be deducted by the employees. But the excise taxes imposed upon efn- ployers by sections BOA and 00l Of the Social Security Act may be deducted by the employers. Also, if an employer pays the income tax on employees under section 60i, the amount may be deducted by the employer as an ordinary and necessary business expense, and the employees are required to report as additional income in their Federal iflcome-tax returns the. amounts Of the tax So paid for them.
 Lincepse fees exactcd by a state or city upon certain businesses are deductible as taxes. Autonlo- bile license fees are ordinarily taxes and deductible. Postage is not g tax and is not deductibIe. In general, taxes are deductible only by the person upon whom they are imposed.
 Federal estate and gift taxes and state inheritance, estate, legacy, or succession taxes are not deductible on federal income tax returns. The federal taxes on automobiles, gasoline, cigarettes, and liquor are imposed upon the manufactures, producer, or import CT and are not deductlble by the purchaser or consumer. Whether or not the gasoline tax or the sales tax levied by a state may be deducted by the individual pnr- chaser depends upon the terms ol the state law imposing the tax: consequently. the right to the de- dncti0n, ss between purchaser and seller, varies in the different states.
 Under tine revenue act Of 103o the amount of exce6s-prOfits tax paid or accrued under tine revenue act Cf 1885 Gas an,en6e6) or thst imposed by section o0z Of the