wife living together), and if net income exceeds $20,000, the additional tax. Partnerships as such are not included, but the partnership income is taxed to the several partners. Persons Subject to Tax Rate of Individual Tax INDIVIDUAL TAX The individual tax applies to every citizen of the United States, whether residing at home or abroad, every person residing in the United States though not a citizen thereof, and to the income derived by aliens from all property owned and from every business, trade or profession carried on in the United States. The following schedule shows the rate of the individual tax: Net income of a single person exceeding $3,000, 1% (normal tax). *Net income of a married person exceeding $4,000, 1%. Net income exceeding $20,000 and not exceeding $50,000, additional 1% on such excess amount. Net income exceeding $50,000 and not exceeding $75,000, additional 2% on such excess amount. Net income exceeding $75,000 and not exceeding $100,000, additional 3% on such excess amount. * See qualification in paragraph on normal tax. Net income exceeding $100,000 and not exceeding $250,000, additional 4% on such excess amount. Net income exceeding $250,000 and not exceeding $500,000, additional 5% on such excess amount. Net income exceeding $500,000, 6% on such excess amount. Includes Individual income includes compensation for What Indivipersonal service, gains and profits from business, dual Income trade, sales or dealing in property, interest, rent and dividends, including the income from, but not the value of, property acquired by gift, bequest, devise or descent, and not including the proceeds of life insurance policies, or payments made by or credited to the insured on life insurance, endowment or annuity contracts. The Act is very indefinite, but apparently, in general, taxable income is that which accrues within the year for which the tax is paid, whether actually received or not. Income which accrued before, but is received within the year, is probably free from tax in that year. In computing individual net income for the Individual purpose of the normal tax, the following prin- Income cipal deductions are allowed: 1. Necessary expenses actually paid in carrying on any business, not including personal living or family expenses. Deductions 2. All interest paid within the year on indebtedness. 3. National, state, county, school and municipal taxes paid within the year, not including those assessed against local benefits. 4. Losses actually sustained during the year incurred in trade or arising from fires, storms or shipwreck, and not compensated for by insurance or otherwise. 5. Debts due actually ascertained to be worthless and charged off within the year. 6. Reasonable allowance for depreciation of property arising out of its use or employment in business, but without deduction for expense of restoring property or making good the exhaustion thereof for which an allowance is or has been made, and without deduction for any amount paid out for new buildings, permanent improvements or betterments made to increase the value of any property or estate. 7. Dividends upon stock or from the net earnings of any corporation, joint-stock company, association or insurance company which is taxable upon its net income. 8. The amount of income, a tax upon which has been paid or withheld for payment at the source of income. The Act provides that in computing net income there shall be excluded interest upon the obligations of a state or any political subdivision thereof and upon the obligations of the United States or its possessions. This probably means that such interest is a deduction, but should be returned as a part of gross income. Year The taxable year ends December 31st, but for Taxable the year ending December 31st, 1913, the tax is computed on the net income accruing from March 1st to December 31st, 1913, inclusive, after deducting five-sixths of the specific exemptions and deductions. On or before the 1st day of March, 1914, Individual and on the 1st day of March in each year there- Returns after, each person subject to tax and having a net income of $3,000 or over for the taxable year, is required to make to the Collector of Internal Revenue for the district in which he resides or has his principal place of business, a return under oath setting forth specifically the gross amount of his income from all separate sources, and deducting from the total thereof the aggregate items of expenses and allowances authorized. In case of liability for the normal tax only, return of dividends from companies whose income is taxable is not required. etc. Guardians, trustees and all persons or corpora- Returns of Guardians, tions acting in any fiduciary capacity are reTrustees, quired to render a return of the net income, subject to the tax, received by them for the person for whom they act, if in excess of $3,000. Deduction at Control or Payment of Annual or Periodical Income of another Person, exceeding $3,000 All persons, firms, corporations and companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, Corporations trustees acting in any trust capacity, executors, Having the administrators, agents, receivers, conservators, employers, and all officers and employees of the Determinable United States having the control or payment of fixed or determinable annual or periodical gains, profits and income of another person, subject to tax, amounting to over $3,000, are required in behalf of such person to deduct and withhold from payment and pay to the Government an amount equivalent to the normal income tax upon the same, and make and render a separate and distinct return of the portion of the income of each person from whom the normal tax has been thus withheld, such return to contain the name and address of such person, or state that the name and address, or the address, as the case may be, are unknown. An exception is made of income derived from dividends which are not deducted at the source. (See deduction No. 7, in paragraph relating to individual deductions.) The person entitled to such income cannot receive the benefit of the deduction of $3,000, with |