The evening Caledonian. [volume] (St. Johnsbury, Vt.) 1918-1920, 1919-01-20
Collector Jones Advises
Everybody Who Earn
ed a Thousand Dol
+, lars Last Year to
Sharpen His
Peucil
SOME SUGGESTIONS
ON COMPUTING TAX
How You Can Ascertain for
Yourself Your Gross
and Net Income for
1918

Portsmouth, N. H., Jan. 18-"The
big Income Tax Drive of 1919 is
now under way, and every prepara-
ton is being made to handle the
largest collection, in the history OF
Income Tex" 'I am not waiting for
the final passage of the new Revenue
Bill by Congress" said Collector
Seth w. Jones today, "nor for the
new regulations and blank forms to
be issued. To get this big tax IN
and get it accurate and complete, |
urge that we all begin now"
"The income tax obligations i'm
posed by the old laws, as well as the
measure now in Congress, consist of
two distinct operations. One is,
file return or statement of all items
of income and items of deductions al
lowable by law, and to do this within
the period named in the law. The
other is, to pay the tax, if any is due.
Neither of these obligations can
be met without careful review of
income and expenditure for the tax
year. THAI is the big job right now,
and that is why say the Income Tax
drive is already under way.
'I am therefore advising every per-
son who earned $1,000 OF over during
the year 1918, to sharpen his pencil
and figure cut 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 18
who are working should include the
earnings OF such children.
.If be sold any propertX at a profit,
. the gain must be computed and in
cluded in gross income. If he rented
any property 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 neces-
sary minor repairs, fire insurance, any
interest he may have paid on mort
gage, and {; 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withdrawn or added to his bank bal
ances, must be included in all cal
culations of income. Bond interest
received during the year must also
be included, except where 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 theil
bankers to write to my Office foi
rule applying to tax on such inter
est.
Dividends on stock shares are
income, and must be included in the
gross figures, although the law does
notsimpose the normal tax on distri.
buttons made by domestic corpora.
tions.
"a 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 fol
resale. From this latter sum sub
tract the inventory of goods OF
hand at the years end, and the re
suit is the cost of goods sold. This
cost, plus necessary expenses in
Cured solely through conduct of tht
gross sales, and the result is the ne
business, is to be deducted from tn,
earnings o. the busines.
"a professional man arrives at hi
professional income by ascertainin.
the total of fees for services and de
ducting tharefrom all expenses con
nected directly and solely with hi
practice.
"a farmer must figure up all in
come derived from the sale or ex
change of products during the yeal
whether such produce was raised OF
the farm or purchased and resold. H
is allowed to deduct from this tota
his expense of the year connecte
with the planting, cultivation, har
vesting and marketing of the crop, o
the care, feeding and marketing o
live stock He is not allowed to de
duct the amount expended in 1918 i
purchasing stock for resale; but whe
such stock is sold its cost is to b
deducted FROM sale price in ascertain
ing the gain to be included in his re
turn of income. The cost price c
stock prior to 1917 cannot be deduct
ed as in the case just cited, if sue
cost was included in the deductio
made in the year of purchase.