Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1919-01-28
What Was Your Income Last Year ?
READ THIS AND GET READY 10 FILE A
RETURN. THE GOVERNMENT DEMANDS
IT.

"The big Income Tax Drive OF 1919 I,
now under way, and every preparation
10 being made to handle the largest col
lection in the history of Income Tax
II am not waiting for the final passage
OF the new Revenue Bill by Congress, >
said Collector Seth w. Jones, "nor fol-
the new regulations and blank forms tc
be issued. To get this big tax in and
get II accurate and complete, urge tha,
we all begin now"
"The income tax obligations imposed
by the old laws, as well ss the measure
now In Congress, consist of two distinc,
operations. One is, 10 file return OF
statement OF all items of income and
items Of deductions allowable by law,
and to do this within the period named
in the law. The other is, to pay the tar,
IL any is due.
Neither OF these obligations can be
met without a careful review of income
and expenditure for the tsx year. Tha,
is the big job right now.
| when the new bill is enacted into
law, ! will have the proper return forms
distributed throughout the District, and
everybody will be informed of the date
when sworn return must be fled.
Meanwhile, there is no need of delay
ing the preparation of figures. Any
thing that Congress does now will not
affect the amount of persons earnings
for 1918. Let Us avoid the bslated
throwing together of figures that may
hit or miss. Guesses cannot be accepted
as the basis of taxation.
"The year 1918 Was a banner year for
salaries and wages, and the high WAT
prices brought unusual profits to the
average small tradesman and to the
farmer. The opinion in Washington is
that q million citizens and residents will
make this year their first income tax
returns.
"All signs indicate that the income
working man and woman. Not all will
have to pay the tax, but nearly all will
be obliged to make sworn statement of
the years income.
81 sm therefore advising every person
who earned $1,000 or over during the
year 1918, to sharpen his pencil and
figure out how he stands.
"He must ascertain accurately his
gross income from all sources-his sal
sry or wages, including overtime pay
and any bonus received as additional
compensation. A married person hsv-
ing children under Is who are working
should include the earnings Of such chill
dren.
''If he sold any property at profit,
the gain must be computed and included
in gross income. II he rented any prop
erty to other persons, the total rents
received In the year must be ascertained,
and from that figure deduction may be
taken for taxes paid on rented property;
the necessary minor repairs, fire insur-
ance, any interest he may have paid on
mortgage, and q reasonable allowance
for annual wear and tear of the rented
property. The balance Is included In
gross income for the year.
Interest on bank deposits, whether
Withdrawn or added to bis bank balances,
must be included in sll calculations OF
income. Bond interest received during
the year must also be included, except
where interest on municipal, county or
state bonds. Interest on United States
Bonds need not be included by the ordi-
nary bond holder who purchased small
amounts. Holders of large amounts OF
l. berry bonds, however, should ask
their bankers to write to my otfice for
the rule applying to tax on such inter
est.
"Dividends on stock shares are income
and must be included In the gross fg-
ures, although the law does not impose
the normal tax on distributions made by
domestic corporations.
"a person buying and selling merchsn-
disc must find his profits for the year on
the following basis: First, ascertain the
gross sales or total cash receipts. Then
add together the inventory at the begin
ming Of the year and the purchases OF
goods for resale. From this latter sum
su btract the inventory Of goods on hand
at the years end, and the result Is the
cost of goods sold. This cost, plus
necessary expenses incurred solely
through conduct of the business, is to
be deducted from the gross sales, and
the result is the net earnings OF sne ousi-
ness. .,
"a professional man arrives at his
professional income by sscertsining the
total of fees for services and deducting
therefrom all expenses connected with
bis practice.
"a farmer must figure up ell income
derived from the sale or exchange OF
products during the year, whether such
produce was raised on the farm or pur-
| chased and rssold. He is allowed to de-
duct from this total his expenses or the
wear connected with the planting, Guilt
walton, harvesting and marketing OF the
crop. or the care, feeding and marketing
of live stock. He Is not allowed to de-
duct the amount expended In lSlS ID
purchasing stock for resale; but when
such stock is sold Its cost is to be de-
ducted from sale price In ascertaining the
gain to be included In his return OF IN
come. The cost price of stock oougnt
prior to 1917 csSnot be deducted As 10
the case just cited, II such cost was 10,
cluded in the deduction made IN tne
year of purchase.
"Tbe farmer is not required to include
in his income tax computation the value
of farm produce consumed by himself
and family. But In cases where ne ex-
changes produce for merchandise, gro
lceries. etc, the market value OF the srti'
cles received in exchange must be In
cluded.
"All other items Of income arising
during the year through personal service
business or trade, through use OF prop
erty or money, should be added into the
gains for 1918.
Everybody wants to know what in'
come is exempt from tax. Very Few
nlnms that fall TO the average man may
| be- legally disregarded in figuring up oil
1918 income. Gifts and bequests can Of
Isliminatad; also proceeds OF life insur
snce received BY the beneficiary OF Al
insured person. A person who casnec
in an endowment policy need report ~
income only that portion which sxceeI'
the total Of the premiums he paid In al
years on that policy. Annuities are mo-
taxabls. unless the person received IL
the year payments which represent
vhsn added to all prior payments OF
the annuity, an amount greater than sns
original cost of the annuity. Dividend
on 1nexpired life insurance policies Ar
/ mot taxable income; but dividends OF
naId-up policies must be considered 10
come. Alimony 10 not income 20 .n
recipient. nor 10 II an allowable deduc
ltion ON the part Of the person who pays
"From the total of all items OF income
II loIrnklona allOWAOl