| Show Many VEany Deductions Allowed by Treasury On Income Tax Every Worker Can Claim Credits Under the New Levy By ALFRED n le IId by Western Newspaper Union Although wartime necessity demands that Uncle Sam collect the highest income taxes in history there is nothing unpatriotic in taking advantage of legitimate ways to lower your payments as provided by law Tax laws are carefully written instruments In writing them congress included included-a a list of deductions which taxpayers may claim These deductions were included for excellent reasons and with the expectation that all taxpayers who wh could honestly claim them would do so The big taxpayer usually finds it advantageous to hire an expert who is familiar w with th each permissible deduction The smaller taxpayer is not so likely to secure outside assistance The latter would do well to determine for himself the deductions deductions deductions de de- de- de he can make legitimately For the person who who makes makes not more than 2000 of or taxable income which means a single man earning not more than 2500 or a l married man or he hear head lr of ot a family earning not more than every every of deductions claimed will mean an nn 1840 reduction in income taxes paid Where larger incomes are involved involved involved in in- savings are arc proportionately greater The following are important deductions deductions deductions de de- de- de which will aid the average taxpayer You Can Deduct License Fees Business Expenses Contributions Interest Taxes All contributions for public purposes purposes pur pur- poses made to the United States any state city or town are deductible deductible ble as are arc contributions to a domestic domestic domestic do do- nonprofit organization tion operated ed exclusively for religious charitable charita carita- ble literary educational or scientific ic purposes or for prevention of cruelty cruelty cru cru- elty to children and animals Church contributions include pew rent assessments etc Organizations lions such as lS USO usa Army and Navy Relief Relict Red Cross community chests etc come under the charitable heading Literary and educational organizations include such institutions institutions Lions as nonprofit colleges and schools the Boy Scouts voters leagues and study groups The scientific scientific sd- sd entitle heading includes all nonpartisan nonpartisan nonpartisan nonpar- nonpar scientific societies It is not permissible to deduct contributions contributions contributions con con- made to a bar association association association tion a medical association a prohibition prohibition prohibition pro pro- association political campaign campaign campaign cam cam- committees volunteer fire companies social fraternities athletic athletic athletic ath ath- letic clubs or gifts to needy friends or relatives Generally speaking the taxpayer taxpayer may deduct any interest paid on borrowings borrowings bor bor- including business personal person person- I Ial al and family debts Because interest in in- i terest lerest paid on behalf behall of a relative or friend is not a n legal obligation on the taxpayer such interest is not deductible As a broad general rule the in individual individual individual in- in can deduct all taxes he personally personally personally per per- pays to the tax collector except except ex ex- federal income estate and gift taxes and state and local benefit inheritance estate legacy or gift taxes Federal taxes which are arc deduct deduct- tile ole include those on admissions dues telephone telegraph transportation tion auto use safety deposit boxes etc Admission taxes collected at theaters theaters theaters the the- aters and other places of amusement amusement amuse amuse- ment meat during 1942 amounted to 10 per cent A 50 cent theater ticket which cost the customer 55 cents represents a 5 cent deduction Automobile owners are to deduct state and local license fees the f federal deral use stamps which cost in 1942 19 drivers driver's license fee and state gasoline tax Automobile owners may not deduct the federal gasoline tax because it is constituted constituted constituted as a tax on the manufacturer and not on the consumer even though it was passed along to him It is the general rule that the taxpayer taxpayer taxpayer tax tax- payer gets credit only for those taxes levied directly upon him For that reason state and federal taxes on cigarettes and liquor are not ble They are stamp taxes levied on the manufacturer or dealer The transportation taxes paid on railroad airline and other personal transportation last year is ble The rate was 5 per cent of the fare for the first 10 months 10 per percent percent percent cent for the last two months The tax on transportation of goods amounting to 3 per cent on all freight and express bills is deductible Taxes imposed by the federal government government gov gov- on jewelry furs and toilet are not deductible They are excise taxes levied on the maker or dealer and are not collection taxes levied on the taxpayer Also deductible are traveling expenses expenses ex ex- required by ones one's employer when such expenses are not reimbursed reimbursed reimbursed by anything over salary wages or commissions commission When your car Is used partly for business and partly for private purposes deduction is allowed only for the portion used for business and then only when the driver is not reimbursed The loss on the sale of a car used partly for business business busi busl- ness and partly for private purposes is divided similarly but only when actually sold and not when used as asa asa asa a trade In addition to deducting the three- three cent state tax on all gasoline used in your car you can also deduct the cost of ot the gasoline and other supplies for business use of the ma ma- chine Dues to labor unions assessments by unions for out of work benefits but not for sick accident or death benefits cost of indemnity of fidelity bonds required by your employment and cost of tools and patterns necessitated necessitated necessitated by the type of work are deductible deductible deductible de de- de- de but only if their life is less than one year If U their life is longer than one year the owner can discount discount discount dis dis- dis- dis count depreciation tion only No deduction is permitted for medical medical med med- ical and dental expenses including accident and health insurance pre pre- unless they exceed 5 per percent percent percent cent of your income Any expense over 5 per cent of income and up to a maximum of 1250 for a single person or 2500 for a family may maybe maybe maybe be deducted This includes hospital bills treatment diagnosis and everything everything ev ev- connected with medical and dental care Farmer Deductions Wages Se Seed d Repairs Tools Toola Fertilizers Depreciation In general a farmer who operates a farm for profit is entitled to deduct deduct deduct de de- de- de duct from gross income as necessary necessary sary expenses all amounts actually expended in hi carrying on the business business business busi busi- ness of farming The wages paid for hired labor are deductible The value of products furnished by the farm and used in the board of hired labor is not a deductible expense but food purchased and furnished to hired hands is deductible Farmers may deduct the cost of grain and hay amounts paid for grinding and processing feed amount paid for hire of machinery cost of farm supplies gasoline for farming repairs and upkeep of cars Amounts expended for repairs and maintenance of farm buildings except except ex ex- the dwelling fences drains and other farm improvements and for repairs and maintenance of farm machinery and equipment are de de- de- de Amounts expended for replacement replacement replacement re re- re- re placement of ot of or additions to to farm machinery farm buildings or other farm equipment of a permanent nature nature nature na na- na- na ture are not deductible as such expenditures expenditures ex ex- are regarded as Investment investment investment invest invest- ment of capital h which ch is returned to the owner through depreciation allowances during the useful life of the property The cost of small tools of short life lile may be deducted The cost of commercial commercial com corn mercial fertilizers and lime the benefit of which is of short duration duration duration dura dura- tion is deductible as an expense The amount expended in the restoration restoration resto resto- ration of soil fertility preparatory to actual production of crops and the ost cost of liming soil to increase productiveness productiveness productiveness pro pro- over a period of or years are capital expenditures and thus are not deductible Fees paid for advertising farm products expenditures for stamps stationery account books and other office supplies purchased for farm use expenditures for travel in connection connection connection con con- with the farm business and I other similar miscellaneous expenditures expenditures expendi expendi- tures are deductible An allowance for depreciation of buildings improvements ma machinery machinery machin machin- chin chin- ery cry or other farm equipment of a permanent nature is deductible The amount claimed on account of depreciation depreciation depreciation de de- de- de should not exceed the original cost of the property Repairs on depreciation on en the dwelling occupied by the farmer or oron oron oron on his personal or household equipment equipment equip equip- ment meat are not deductible It is not permissible to claim as a separate item depreciation on livestock or any other property included in the farmers farmers farmer's farmers farmer's farm farm- ers er's inventory as such depreciation is taken care of in the reduced amount of the inventory at the close of the year However depreciation may be claimed on livestock acquired acquired acquired ac ac- ac- ac for work breeding or dairy purposes which are not included Inthe in inthe inthe the Inventory of livestock purchased purchased purchased pur pur- chased or raised for sale |
