INCOME TAX IN AMERICA.

Otago Daily Times, Issue 19239, 1 August 1924, Page 4

INCOME TAX IN AMERICA.

NUMEROUS DEDUCTIONS ALLOWED. Thoee who cross the sea, said Horace, change their sky but not thein disposition. Nm. in these days, do they escape income tax (writes an alien resident in the Daily Mail). The Englishman living in the United Mates is justly required to contribute, equally with the American citizen, to the upkeep of the Government which guarantees him the blessings of law and order. The annual collection has just been made. Every resident in America has to compute liia annual profits and losses to hand to the district collector of “internal” (not “inland’’) revenue. In America you do not wait, after giving in your return, for an assessment end a demand note. You assess yourself; and you pay “right away”—either ihe whole tax, or, if you prefer, the first of four quarterly instalments. You take an oath before tho collector that you have made a true and complete return. Your papers then pass under the scrutiny of the centra] offices of the Bureau of Internal Revenue. Your returns are not computed on any three years’ average. You pay on your actual net income for the last calendar year. , The deductions allowed are much more liberal than those at Home. In Bio first place, you get a personal exemption of 1000 dollars if you are a or of 2500 dollars if you are the head of a family or a married man living with your wife. You may also strike off 400 dollars for every child under IS or other dependent person incapable of self-support. Q

'lTie deductions that can be claimed for business or professional expenses are very much the same as those permitted in England. But there are other forms of relief that conic to the Englishman in America as a welcome novelty. You may deduct, for instance, a loss sustained by reason of fire, storm, shipwreck, or other casualty, whether it is connected with your occupation or not. Thus, if your, automobile is destroyed by fire or your summer bungalow is damaged by'a stoim, you may deduct the loss thereby sustained, insofar as it has not been covered by insurance. Losses by bniydary or theft or embezzlement aro also deductible. You may further subtract from your total whatever taxes, other than Federal income tax, you have paid during the year. These ini elude taxes on personal property and real estate, as well as the local taxes that in England we call “rates.” The fees fon automobile licenses arc regarded as taxes, and may therefore be- deducted, also Customs duties paid on articles imported for your own use. If you are a benevolently disposed and public-spirited person, tho Government rewards your virtue. For- you may deduct any contributions you have "made to funds organised for religions, charitable, scientific, literary, or educational purposes. Every church constitutes a religious organil nation within the meaning of the Act. No deduction is allowed for a gift of cbns to an individual. It mast l« made to a charitable society or organised ‘und.