Evening star., 1947-03-03
Your Income
Tax Return
Seventh of a Series OF H.
BY jones MorIow

/ ] UA NStuT0
(Sepenth Of a Series OF 12.)
By jones Morrow
Associated Press SioH Writsf
Watch your deductions in filing
your 1916 income tax return. They
may save you money. A deduction
is the amount of money for personal
or business expenses you can deduct
from your total income before 1t is
taxable.
You can deduct many expenses.
Some kinds of income, being tax
exempt, don't have to be reported at
all.
The size of the deductions will
decide for many people the kind Of
tax return they use.
If your income was 5000 or over,
you have no choice about forms. You
| must file on the 1040 long-form.
When you use the long-form:
l. You can take the standard $500
deduction allowed everyone, with
out itenizing or accounting for any
of it. Just take $500, provided your
income was 5000 or over.
2. Or, If your deductions were ac-
tually more than $500, you can claim
them in full but, in that case, you
must itemize every penny.
Example Offered.
Suppose your income was under
5000. You, too. depending upon
your individual case, can do one of
two things:
1. You can file on form W., the
withholding statement, or on the
1040 short-form. Either way you're
automatically allowed 10 per cent
deduction for expenses, even though
they weren't that much.
That 10 per cent already has been
allowed for in the tax-table used
with those two forms.
2. Or, if your deductions were ac-
tuaIy more than 10 percent, you can
use the 1040 long-form. Then you'll |
have to itemize your deductions, and
work out your tax. But you can
claim them in full.
Here's some tax-exempt income
which doesn't have to be reported
Unemployment compensation; life
insurance paid because of the death
Of the insured; social security bene-
fits; mastering -out pay; monthly al
loWances to the families of service
men; sickness and injury benefits
received through accident or health
insurance or under workmen's COM
pensation laws; inheritances or be-
quests OF money or property, al
though the income from them Is |
taxable. Gifts to relatives or other
individuals can't be deducted by the
person making the gift. Exemptions
on annuities is too complicated to 20
into here. If you have question
about them, ask your internal rev.
enue collector.)
Deductions Listed.
Here are deductible expenses:
Charitable contributions (the to-
tai OF them can't exceed IS per cent
OF income and can't be made to
lnd1Viduals) to charitable, religious,
scientific, fraternal and veterans
organizations, and nonprofit educa-
tional institutions.
Here are other deductible ex-
penses:
Interest paid on personal debts.
such as bank loans and mortgages;
State income and personal property
and real estate taxes except those
taxes - like paving assessments Il
which tend to increase the value of
your property.
+ Here are others:
: State gasoline taxes (except in
Alabama, California, Florida, Louis
lana, Mississippi, Utah and Wyom-
lng); sales taxes (if tax is shown
separately on price tag); property |
losses from theft or fire, storm, auto
accidents; special $500 deduction
for the blind: use Of your car for /
business, which includes the cost of 4
gasoline. oil, grease. repairs, clean
ing; union dues, entertaining for
business purposes; subscriptions to |;
professional journals, books, news
papers and magazines bought for
use in your profession; equipment,
tools and instruments used on your
Job; cost Of work clothes and uni
forms when not taking the place
OF ordinary clothing; and alimony
(the husband who pays it can de-
duct it but the divorced wife who
receives it must report 1t as part of
her income.)
NOndeductible Expenses.
Unless paid for business purpose,
you can't deduct the following fed
eral taxes: On admissions to the
aters and sporting events, club dues.
telephone and telegraph services;
and transportation, such as railroad
and bus fares.
You can deduct for medical, hos
pital and dental expenses to this
extent: Up to per cent of your
income they're not deductible. After
that they are but
They're limited to $1,250 If you
file a return for yourself alone, or
$4,000 if you claim more than one
exemption. Example:
Your income was $4,000. Five per
cent of that is $500. But your med
ical expenses were $500. Subtract
the $500 from the $500. That leaves
you 5000 to deduct from your in
come as medical expenses.
(TomoroU:: Veterans and
Serpicemen.)
Jewish Connress limits