The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1954-08-14
Rundown Given On Possible
New Income Tax Deductions
By CHARLES ?. BARRETT

BY CHARLES 2. BARRETT
WASHINGTON R-N you buy
something on the installment
plan...
II you make big donations 10
charity.
If you pay some of your trans
pOrtation expense in your work..
If your employer provides your
meals or lodging.
Then you may &c. q tai cut I'm
der the big tax revision act re.
Gently passed by Congress.
These are some of the scores OF
new or more liberal deductions you
can count in your 1854 return due
next April Is
Here is a rundown on some Of
the deductions:
Instanment purchase-the act
permits you to deduct from your
income, for tax purposes, any in
tereSt you pay. Under the old law,
you could deduct interest ON in
stallment purchases only If the in
terest was stated separately in
your bills. If you just paid a gen.
eral carrying charge and didn't
know how much of it was interest,
you got no deduction. Under the
new law You may automatically
deduct per cent of the average
unpaid balance of your bin during
the tax year. II the interest is
stated separately, Of course, you
deduct the exact interest. This item
alone Is expected 10 give about
/ ,6O0, 900 taxpayers 4 tax cut TO-
falling about 10 million dollars.
You may now deduct up
to 30 per cent of your
i n o m for contributions
to. charity and benevolences. The
old Limit was 20 per cent. But the
extra 10 per cent is allowable only
for contributions to churches or
religious groups, educational in
StitutionS or hospitals. In other
words, Il you claim the full 30
per cent, at least 10 per cent must
be for contributions to those or
CARNATIONS. This provision is ex.
pected to reduce revenues by Is
million dollars a year.
Transportation expenses-the
new rules govern your business
transportation expense where (1)
you are not reimbursed by your
employer and (2) the expense is
not incurred in overnight travel
away from home. Under the old
law, these expenses could be de-
Quoted only under personal deduc.
tons. This means that to claim
them, you had to itemize all your
personal deductions and forego the
standard 10 per cent personal de.
duction allowed most taxpayers. In
many cases It wouldn't pay you
+! to itemize these and other deduc.
tons because the standard 10 Dol
cent would give you a bigger to.
tai deduction. In effect, the new
law permits you to deduct trans.
portation expense and, in addition,
take the standard deduction Of
10 per cent Of your remaining in.
come.
Here is an example Of how The
new rules work. Say you had ex
penses Of $500 covered By the new
rule, with other personal deduc.
tons of 500 and an income o.
5000. Under the old law you could
itemize your deductions and claim
only $500, while you could get $500
under the standard 10 per cent
Under the new law, you could de
duct your 500 transportation ex.
pense and still deduct 10 per cen.
OF your remaining $500 income.
That would be a total deduction
OF $50, instead Of the $500 under
me Old lava tax cut Of at leas.
$S4.N.
| Meals and lodging-under the
OLD law, an employe could be
taxed on meals and lodging pro.
wed by an employer If there was
any indication at all that this was
considered part Of the employees
compensation. Under the new law,
tsev WI be taxed as ircona ely
/ 10y s-3 r-cvSi c'sar'v fer the
/ &C - = o. t-.a er-.-L-.-.