The Beaver herald. [volume] (Beaver, O.T. [Okla.]) 1895-1923, 1919-01-23
INCOME TAX INFORMATION.

II am therefore advising every un-
married person who earned $1,000, or
over during the year 1918. and every
married person. who together with
wife or husband. earned $4,000, to
sharpen his pencil and figure out how
he stands.
He must ascertain accurately his
gross income from all sources.
There's his salary or wages, including
overtime pay and any bonus received
as additional compensation. A mar
ried person having children under 1s
who are working should include the
earnings of such children.
"If he sold any property at
profit, the gain must be computed
and included In gross income. II he
rented any property to other persons,
the total rents received in the year
must be ascertained, and from that
figure deduction may be takeen for
taxes paid on rented property, the
necessary miner repairs. fire insur-
ance, any interest he may have paid
on mortgage, and a reasonable allow
ance for annual wear and tear of the
rented property. The balance is in.
cluded in gross income for the year.
Interest on bank deposits. wheth-
err withdrawn or added to his bank
balance. must be included in all
! calculations of income. Bond inter-
est received during the year must al
so be included, except interest on
municipal. county or state bonds. In
terest on United States Bonds need
| not be included by the ordinary bond
holder who purchased small amounts.
Holders of large amounts of Liberty
bonds. however, should ask their
bankers to write to my Office for the
rule applying 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 distri-
buttons made by domestic corpora
ions.
"A person buying and selling
merchandise 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 purchases of goods for resale.
From this latter sum subtract the
inventory of goods on hand at the
years end, and the result is the cost
of goods sold. This cost, plus neces-
sary expenses incurred solely
through conduct of the business. is to
be deducted from the gross sales. and
the result Is the net earnings OF the
business.
"A professional man arrives at his
professional income by ascertaining
the total of fees for services and de-
ducting therefore 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 this total
his expenses of the year connected
with the planting. cultivation. har-
vesting and marketing of the crop, or
the care. feeding and marketing OF
livestock. He Is aot allowed to de-
duct the amount expended in 1918 in
purchasing stock for resale; but
when such stock is sold its cost is to
be deducted from sale price in ascer.
tanning the gain to be included in his
return of income. The cost price oi
stock bought prior to 1917 cannot bs
deducted as in the case just cited, II
such cost was included In the deduc
tion made in the year OF purchase.
"The farmer is not required to in
clude in his income tax computation
the value of farm produce consume,
by himself and family. But in case
where he changes produce fol
merchandise. groceries. ETC., thu
market value of the articles received
in exchange must be included.
"All other items of income arisfni
Il during the year through persona
q service, business or trade, through
use of property or money. should b.
:, added into the gains for 1918.
I Everybody wants to know wha
income is exempt from tax. Very few
I plums that fall to the average maj
; may be legally disregarded in figurinI
up his 1918 income. Gifts and be
a quests can be eliminated; also pro
|, ceeds of life insurance received by tn