The Waterbury Democrat., 1943-02-12
YOUR INCOME
TAX
No. 80
DEDUCTIONS FOR TAXES

DEDUCTIONS FOR TAXES
Taxes are, in general, q deducti-
BILE item In arriving at net income
for Federal income tax purposes.
In the case Of taxes incurred In
connection with o trade or profess
sion, the amount is shown in
Schedule II to arrive at net profit
Cor loss) from business or profess
sion entered In item Q Of the re-
turn, Form 1910; taxes on rental
property should be shown In Sched-
ule 3, while other taxes deductible
should be shown in item IA OF De-
auctions. Taxes shown in item II
must also be supported by an eX-
PLANTATION Gin Schedule O. Of the
deduction.
The deductibility Of taxes is sub
ject to four general limitations:
/. Taxes are generally deducti.
BILE only by the person upon whom
they are, by law, imposed;
2. Federal income, war profits,
and excess profits taxes are not
deductible for Federal income tax
purposes;
8. Taxes for local benefits, such
as assessments for street, sidewalk,
sewage, and other local improve
ments which tend to enhance the
value Of the property taxed, are
not deductible except amounts al
locable to maintenance or interest
charges;
4. The tax must be a tax for
public purposes. Charges for gov
ernmental services such as mdnici-
pal water bills, parking meter
charges, service fees, and the Ike
are not deductible as taxes, but are
deductible as expenses If incurred
In a trade or business.
In the case Of State and LOCAL
"sales taxes" If the amount OF the
tax is measured oy the price Of
the article sold, or by sum per
unit of the article sold, and is sepa-
rately stated, the amount paid is
deductible by the purchaser.
The Federal tax on gasoline Is
levied upon the producer or i'm
porter, and consequently is not de-
ductible by the individual con-
sumner Except that in the case of
gasoline used for business purposes
It may be included In the cost Of
the gasoline as business expense)
Federal duties and excise taxes
are, in general, imposed upon the
manufacturer importer, or dealer,
and consequently are not deductible
by the consumer, or vendee. This
applies TO the Federal e::cise tax on
automobiles, tires. lubricating oils.
mechanical refrigerators, radios,
and other commodities. as well as
TO the luxury taxes" on perfumes.
toilet preparations. jewellery. and
the like. II also applies 10 the tax
on electrical energy, liquor, tobacco,
cigarettes, playing cards, and the
like.
Taxes imposed by the United
States dovernnei on the follow
Ing items may be deducted: Ad-
missions. club dues, telephone and
telegraph services, safe deposit
boxes. transportation OF persons and
property, use Of motor vehicle o.
boat, and documents.
Federal employment taxes 70.
CURED 70 be paid By an employer
are deduetible but the amount o
such taxes required 10 be withhell
by the employer from the compen'
antion Of employees ~ payments an
made n not allowable ~ q dodiio'
ton By the elnpl0ye f0r KoneFh
income tax purposes.
IN the ease o. ed Valogom prop
erty taxes, the deduction Il nIIoWel
! n11Ill A tia ssznaaR AZ Tia nr04nrlV
Thus, e q man and hI1 VIE ~
Ming separate returns, ana ~
Nome 4 aNned ~ ne wife. thsI
no nFonarlg laNes on that homl
are dlenellbla enly ~ fhe wife,
return.
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