Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1919-02-21
Income Tax Facts You Should
Know.

frequent inquiries as to the amount to be
included under gross income" tax returns.
In making out his return of gross income
the taxpayer is required to account for
practically every dollar he receives during
1918. The following items must be re-
ported:
Salaries. wages. and commissions for
personal services, including bonuses.
Interest received on notes. and deposits
in banks, including savings banks.
Dividends on stock, whether received in
cash or stock. Only dividends paid out of
earnings or profits accrued since March 1.
1918. are taxable.
Profits resulting from purchases and
sales of property. real or personal If the
property was purchased before March I.
1918, the profit is based on the difference
between the selling price and the fair
market price or value as Of March l. 1918.
PROFITS ON STOCK TRADE.
Profits from stock market transactions.
Income received from fiduciaries, that is,
amounts received from income estates,
trusts, ETC., through trustees, administra-
tors or executors.
Net partnership profits, whether divided
or distributed or not.
Royalties from mines, oil and gas wells.
patents, copyrights and franchises.
The following items are not taxable
and need not be included in the return
Property received as a gift or by will or
inheritance. II must be understood how
ever. that the income derived from such
property is taxable.
Proceeds of life insurance policies
Returns from premium on life endow-
ment and annuity policies.
Interest on securities issued under the
provisions of the Federal farm loan act of
July II, 1916
ACCIDENT INSURANCE EXEMPT.
Amounts received through accident or
health insurance, or under workmans COM
pensation acts, plus the amount of dam
ages received. whether by suit or agree
ment on account of such injuries or sick
ness.
Amount received during the war by
person in the military or naval forces for
active service not to exceed $500.
Interest on obligations of any State or
political subdivision of State. such as a
city, county. town or village. and the Dis
trict of Columbia. Interest on obligations
of the United States is exempt, except that
interest on obligations issued after Sep
TENDER l. 1917. is exempt only to the ex-
tent provided in the liberty loan acts.
Interest on liberty loan bonds to the par
vaiue of $4,000 is exempt from all taxa
ton. Holders of large amounts of liberty
bonds are advised to consult their bankers
or collectors of internal revenue as to their
interest exemptions.
THOSE To MAKE REPORTS.
A single person whose gross income for
the year 1918 was $1,000 or more
A married person whose gross income
for the year 1918 was $4,000 or more
Husband and wife living together whose
gross incomes added exceed $4,000 each
shall make return. unless the income Of
both is included in one report
PERSONAL EXEMPTION.
A single person is allowed personal
exemption Of $1,000.
A married person or head of a family is
allowed a personal exemption of $4,000.
A married person not living with hus-
band or wife is allowed personal exemp-
ton of $1,000.
An additional exemption Of $500 is al
lowed for each child or each person (other
than husband or wife, dependent upon
and receiving his chief support from the
taxpayer. if such dependent person is I'M
der IS years Of age or is incapable of self
support because mentally or physically
defective.
A husband and wife living together are
entitled TO but one personal exemption of
$4,000 and in case they make separate
returns the personal exemption of $4,000
may be taken by either or divided between
them.
Failing to have your report in the hands
Of the collector of internal revenue for your
district before the time prescribed by law.
which is March 18th, 1919. you will be
liable to a penalty Of $1,000. In view Of
this you should. therefore. use extreme
care to see that your report reaches the
collector before March 18th 1919.