Masonry Magazine July 1970 Page. 36
Taxes
(Continued from page 16)
accounting methods of a manufacturer who used the accrual method of accounting. The Commissioner felt that this taxpayer's accounting method did not clearly reflect income. It seems that although there was no formal agreement between the manufacturer and his employees, each year the board of directors would determine how much each employee was to get by way of a bonus. Each employee's share in the bonus depended on his wages and on a merit rating system. This system of bonuses, intended to stimulate production, had been in effect for 30 years.
After ruling on the accounting methods of the taxpayer, the court turned its attention to the deductibility of the bonuses paid. The court found no reason why the bonuses could not be deducted but ruled that the taxpayer had lost the privilege of deciding whether it would pay a bonus each year. The company had to pay a bonus, said the court. The fact that the bonuses had been paid consistently for 30 years resulted in an understanding between the taxpayer and its employees. Lincoln Electric Co. v. Commissioner, 54 TC No. 89.
want to save these figures for your tax file and glance at them when you prepare your 1970 tax return next year. The following chart was prepared by Commerce Clearing House. In addition to showing the average deductions for the four main classes according to the level of the adjusted gross income, the chart also shows for each adjusted gross income class a percentage, which represents, on the average, the ratio of total itemized deductions to adjusted gross income.
Of all the returns that itemized deductions only 75% claimed a medical and dental expense deduction, Whereas, 99% of the itemizing returns deducted taxes paid. A contribution deduction was claimed by all except 5% of the returns and interest deductions were made by 81%.
One final note these figures on the chart represent averages only and are by no means the amounts or percentages that the IRS "accepts."
AVERAGE ITEMIZED DEDUCTIONS FOR 1968 BY ADJUSTED GROSS INCOME CLASSES
ADJUSTED
Goos
Income
Classes
Total
Medical Deductions
Contri
hutions
k
Interest
Tases
Dental
of AGI
57,000-5 8,000
8,000 9.000
9,000-10,000
5232 $495
$490
5327
21%
214
561
561
314
20%
268
629
625
321
20%
10,000-15,000
312
736
792
294
18%
15,000-20,000
454
914
1,095
316
16%
20,000-25,000
586
1,111
1,453
372
16%
714
1,508
1.778
451
15%
1,096
1,752 2,486
411
15%
AVERAGE DEDUCTIONS
The job of filling out a tax return is often very lonely. You wonder if the amount of your deductions "look" too large. Sometimes you wonder if you are claiming far less than others in your situation. If you've ever had such thoughts as these you may find it worth your while to go dig out your 1968 return and compare your figures with the average deductions taken that year. You might
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August 20-21, 1970
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36
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Name.
Company
Address
City
Advertisers Index...
LET THEM KNOW YOU SAW IT IN MASONRY
Advertisers Index
A
AA Wire Products Co.
Anchor Manufacturing Co.
AYCO Felker Corporation
Bluff City Manufacturing Co.
Clipper Manufacturing Co., Inc.
Norton Construction Products Div.
C
D
Dur-O-Wal National, Inc.
E
Essick Manufacturing Company, Div. of A-T-O Inc.
Robert G. Evans Co. (Target)
F
Felker Mfg. Co. (See AVCO Felker Corp.)
M
Massey Ferguson, Inc.
Morgen Manufacturing Co.
N
National Concrete Masonry Association
33
27
24
Back Cover
20
18
21
5
Ohio Lime Co.
Oury Engineering Co., Div. of Harsco Corp.
Pfizer Minerals, Pigments & Metals Div.
2nd Cover
Pittsburgh Corning Corp.
14
T
Thomsen Div., Royal Industries
3rd Cover
Trinity White, General Portland Cement Co.
17
State
This index is published as a convenience to the reader. Every care is taken to make it accurate but masonry assumes no responsibilities for errors or omissions.
masonry
July, 1970