The Lexington intelligencer. [volume] (Lexington, Mo.) 1901-1949, 1914-03-13
HOW FARMERS SHOULD
COMPUTE THEIR INCOMES
incomes Under $4,000 Not At
fected Bv Income Tax.

19l4.-If a farmer is so fortunate
as to have a net income Of over
$1,000 a year in case he is a
bachelor, or $4,000 if married, he
is subject to the income tax, and
under the law each Individual
must make return to the Internal
Revenue collector Of his district
on or before the first day of
March if he has a net income of
$4,000 or over ($2,50O for the
ten months of 1913. While
the interest Of most farmers in
this subject is purely academic,
the Department of Agriculture
has received inquiries indicating
that some wish to know just
what is required of them under
the new law.
The income tax law of October
3, 1913, places a tax of l per
cent upon all net incomes Of over
$4,000, with an additional tax
on incomes Of 100000 or more.
The first question arising in the
minds of most people is what
constitutes a net income. For a
man receiving a regular salary,
or a business man with a good
system of bookkeeping, it is easy
to determine whether or not
his income is taxable. But for
the farmer who receives no stat
ed income, and who often fails
to keep accurate account Of re-
ceipts and expenditures, it is
more difficult to calculate his
net income.
In order that farmers may be
posted on the income tax as it
may concern them, the following
information has been furnished
by the Internal Revenue Bureau
of the Treasury Department.
In general, an income consists
of amounts derived from salaries
wages or compensation for per
sonal service, paid in any form
also from professions, business
sales or dealings in property, OF
from rents. interest on bonds OF
mortgages, dividends on stocks
or other income from invest
ments. These items constitute
gross income, from which there
should be deducted the expenses
of carrying on the business in
terest paid on Indebtedness
worthless debts charged off; loss
es by fire, storm or shipwreck
not covered by insurance; eX.
haustion, wear and tear of prop
erty, and any income upon which
the income tax has already beer
deducted at the source, as, fol
instance, dividends on the Stocl
of a corporation which has al
ready paid the tax on its earn
iings.
The provisions regarding ne
< incomes Of $4,000 apply only tt
unmarried persons, or to married
, persons not living with wife o.
. husband. A husband and wifi
, living together are entitled +,
, an exemption of $4,000 on thei
f aggregate income. This mean
that in case the wife has a sep
q arate income. if this added t
: the husbands income amounts +
= $1,000 the total is subject to tn
b. tax; or, if the wife has no sepa
q rate income, the husbands II
come amounts to $4,000 the tOta
is subject to the tax; or, if tn
T. wife has no separate income
p the husbands income is taxabl
only in case it reaches $4,000
But a return must be made
s the aggregate income of both
!. S $500 for the year 1913. TIL
n joint exemption, however, woul
be $3,333.33.
0 In arriving at his net incom
y the farmer should start with h
gross income. This would co
sist Of any items OF the kin
above enumerated, and espe.
tally all receipts from the sale