The Dawson news. (Dawson, Ga.) 1889-current, 1919-02-04
MFSSACE TO YOU FROM -
ruF H. S. INCOME TAX MAN

''He must ascertain accurately his
gross income from all sources. There's
his salary or wages, including over
time pay and any bonuses received as
additional compensation. A married
person having children under Is who
are working should include the earn
ings of such children.
''If he sold any property at profit
the gain must be enumerated and in
Guided in gross income. If he rented
any property to other persons the to-
tai rents received in the year must
be ascertained, and from that figure
deduction may be taken for taxes
paid on rented property, the neces-
sary minor repairs, fire insurance, and
any interest he may have paid on
mortgage, and reasonable allowance
for annual wear and tear of the rent
ed property. The balance is included
in gross income for the year
Interest on bank deposits, whether
withdrawn, or added to his bank bal
ances, must be included in all calcu-
lations of income. Bond interest re-
ceived during the year must also be
included, except interest on municipal
county or state bonds. Interest on
United States bonds need not be in
cluded by the ordinary bond holder
who purchased small amounts. Hold
ers of large amounts of Liberty bonds,
however, should ask their bankers to
write to my office for the rule ap-
plying to tax on such interest.
Dividends on stock shares are in
come, and must be included in the
gross figures, although the law does
not impose the normal tax on dis
tributions made by domestic corpor-
atoms.
ga person buying and selling mer-
chandise must find his profits for the
year on the following basis: First
ascertain the gross sales or total cash
receipts. Then add together the in
ventory at the beginning of the year
and the purchase of goods for resale.
From this latter sum subtract the
inventory of goods on hand at the
end of the year, 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 gross sales, and
the result is the net earnings Of the
business.
GA professional man arrives at his
professional income by ascertaining
the total of fees for services and de-
Quoting therefrom all expenses con-
nected directly and solely with his
practice.
"a farmer must figure up all in
come derived from the sale or ex-
change of products during the year,
whether such produce was raised on
the farm or purchased and resold.
He is allowed to deduct from his
total expenses of the year connected
with the planting, cultivation, har-
vesting and marketing of the crops
or the care. feeding and marketing
of live stock.
"He is not allowed to deduct the
amount expended in 1918 for the
purchase of stock for resale, but when
such stock is sold its cost is to be de-
Quoted from the sale price as ascer-
tanning the gain to be included in his
return of income. The cost price of
stock bought prior to 1917 cannot be
deducted as in the case just cited, if
such cost was included in the deduc-
ton made in the year of purchase.
'"The farmer is not required to in
/ clude in his income tax computation
the value of produce consumed by
himself and family. But in cases
where he exchanges produce for mer-
chandise, groceries, ETC., the market
value of the articles received in ex-
change must be included.
"All other items of income arising
during the year through personal ser
vice, business or trade, or through
use of property or money. should be
added into the gain for 1918.
Exemptions Are Few
Everybody wants to know what
income is exempt from tax. Very
few plums that fall to the average
man may be legally disregarded in
figuring up his 1918 income. Gifts
and requests can be eliminated; also
proceeds of life insurance received
by the beneficiary of an insured per-
son. A person who cashed in an en-
dowment policy need report as in
come only that portion which exceeds
the total of the premiums he paid in
all years on that policy. Annuties
are not taxable, unless the person re-
ceived in the year payments which
represent, when added to all prior
payments on the annuity, an amount
greater than the original cost of the
annuity. Dividends on unexpired life
insurance policies are not taxable
income; but dividends on paid up pol
icies must be considered income. AL
imony is not income to the recipient,
nor is it an allowable deduction on