The Cook County news-herald. [volume] (Grand Marais, Cook County, Minn.) 1909-current, 1919-02-05
8 \ ING T. Ak Ed cATlON
Continued from first page


residents will make this year their
first income tax returns. ~. d
All signs indicate that the In
come tax this year will reach nearly
every workingmar, and woman, and
nearly every merchant, shop keeper.
and farmer. Not all will have to pay
the tax, but nearly all will be OBJ
liged to make a sworn statement Of
the years income. 5= 3 s. a:
Il 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. ..* 49, I
He must ascertain accurately his
gross income from all sources.
There's his salary or wages, includ-
ing overtime pay and any bonus re-
ceived as additional compensation.
"A married person having children
under 18 who are working should in
clude the earnings of such children.
IF he sold any property at a pro
tit, the gain must be computed and
included in gross income. If he
rented any property to other per-
sons, the total rents received in the
year must be ascertained, and from
that figure deduction may be TAX
en- for taxes paid on rented property,
the necessary minor repairs, fire in
surance, any interest he may have
paid on mortgage, and a 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, whe-
Their withdrawn or added to his bank
balances, must be included in all
calculations Of income. Bond interest
received during the year must also
be included, except interest on
municipal, county or state bonds.
Interest 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 nv Of
fee for the rule applying to tax in
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 cor
porations.
IA person buying and selling mer-
chandise must find his profits for the
year on the following basis: First,
ascertain the gross sales or tota'
cash receipts. Then add together
the inventory 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 necessary expenses incur
red 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
deducting therefrom all expenses
connected 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 con-
nected with the planting, cultivation
harvesting and marketing of the
crop, or the care, feeding and mar
keting of live stock. He is not al
lowed to deduct the amount expend-
ed in 1918 in purchasing stock for
resale; but when such stock is sold
it's cost is to be deducted from sale
price in ascertaining 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 in
Guided in the deduction made in the
year Of purchase.
1.-THE farmer is not required to in
clude in his income tax computation
the value Of farm 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.
= Cali other items of income arising
during the year through personal
service, business or trade, through