Show I II I j Income TaxI Tax I No 5 I I The term earned earned income In computing which the taxpayer le Is allowed on all nit net income up to and not exceeding a credit ot of which 25 per cent ot of oi the amount ot of tax Is defined by In income como ta tax tae regulations as wages ages salaries professional tees fees and other amounts received cd for per per- perI personal per I sen ices actually rendered I Howe However er there arc are thousands ot of I cass cases ot of ers engaged in a I trade or business in which both bothI I personal sen Ico and capital are material Income producing factors In III such cases it Is pro provided that a reasonable allo allowance ance In corn com for tor personal services shall be considered as earned In Income come It la is further urther provided that I the total amount treated as earnd earn d Income from a trade or business shall hall not exceed 20 per cent ot of othe the taxpayers taxpayer's ers er's share ot of the tho net netI I profits qt such trade or business A reasonable allo allowance ance for tor or per personal personal soral services sen ices in general li is inter interpreted I bv by regulations to mean only only such amount as would or- or ordinarily or ordinarily be paid for lor like sel sen Ices I by like enterprises In like circum- circum circumstances circum stances I circum-I The revenue act ot of 1921 1021 pro pro- provides provides provides vides for tor cal canned ne 1 income deduc deduc- deductions i Title This means deductions I w hick are property properly allocable to or chargeable against earned in- in in income orI I come conic and which hl h al aye aie e allow able from gross income in computing net income Notable among such deductions are business s expenses e e Frequently ta taxpayers payers receiving a salary may be compelled to use a portion in payment ot of transports transports- Lion advertising or for tor or samples I Such items which are necessary e expenses In the conduct ot of a bust bustness bunness ness are properly chargeable against cal ned income The term earned net income on which the credit Is computed means the I excess otI ot of the amount ot of o the I earned income over the tho sum slim ot of othe the earned Income deductions Thus Thus a man who ho In tn 1924 1024 recen ed eda a salary of ot ot of which he ho paid I BOO tot for necessary expenses In connection with the business corn com his tax tan on earned net In- In Income income In Income come ot of from which ot of course should be bo deducted his personal 2500 exemptions exemptions 2500 for tor a married person 1000 tor for I a n sin sin- single tin sin tingle gle glo person plus for fot or each etch tie tie- de dependent pendent pendent-In pendent in ascertaining earned income In come conle credit on |