Ripley County democrat. (Doniphan, Mo.) 1905-1920, 1914-03-13
How Farmers Should Com
pute Their Incomes.

Washington, D. C.-If q far.
mer is 80 fortunate rs to hkve Q
net income of over $1,000 q year
in case he is bachelor, or S4,.
eco II married, he is subject tc
the income tax, and under the
law each individual must make
return to the Internal Revenue
collector of his district on or be-
fore the first day Of March if he
has q net income Of 5000 OF
over (S2,500 for the ten months
Of 1879. While the interest OF
most farmers in this subject is
purely academic, the Depart
msnt of Agriculture has received
inquiries indicating that some
wish to know just what is requir-
ed OF them under the new law.
The income tax law Of October
3, 1913, places a tax Of / per cent
upon all net incomes of over So, :
600. with an additional tax on in.
comes Of over $20,O or more.
The first question arising in the
minds OF most people 10 what con-
stitutes a net income. For a man
receiving \ regular salary, or a
business man with q good sys-
ten OF bookkeeping, 1t is easy to
determine whether or not his in i.
come ls taxable. But for the
farmer who receives no stated in
come. and who often fails to keep
accurate account of receipts and
expenditures. it is more difficult
to calculate his net income.
In order that farmers may be
pOs,sd on the income tax as IL
MAY e9ncern 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; or
other incomes from investm ente.
These items constitute gross in
come, from which there should
be deducted the expenses of
carrying on the business; inter-
est paid on Indebtedness; worth
less debts charged off: losses by
fire, storm or shipwreck, not COW
cred by insurance; exhaustion,
wear and tear OF property, and
any income upon which the in
come tax has already been de-.
ducted at the source, as, for in
stance, dividends on the stock of
a corporation which has already
paid the tax on its earnings.
The provisions regarding net
incomes of $1,000 apply only to-
persons, or to married
persons not living with wife or
husband. A husband and wife
living together are entitled to an
exemption Of 81 900 on their az.
gregate income. This means that
in case the wife has q separate
income, il this added to the hus-
bands inc ONE amounts to $4,000
the total is subject to the tax or,
II the wife has no separate in.
come, the husbands income is
taxable only in case II reaches
1900. But a return must be
made If the aggregate income Of
both is s2,5OO for the year 1918.
The joint exemption, however,
would be SS, 1888.
In arriving at his net income
the farmer should start with his
gross income. This would con.
sist OF any items of the kind
above enumerated, and especi-
ally Ill receipts from the sale Of
products Of every description
from the farm, This would in.
cluds all money received for pro-
dues and animsls sold, and for
the wool and hides OF animals
slaughtered, ifthe wool and hides
are sold; but he may dsdues from
these iisme the amounts actually