The courier-index., 1919-01-24

Congress does now will not affect
the amount of a persons earnings
for 1918. Let us avoid the belated
throwing together of figures that hit
or miss. Guesses cannot be accept
ed as the basis of taxation. IL is
clearly the duty of every person to
compile correct figures and ascer-
tain whether his income for 1918 was
sufficient to make necessary a sworn
return.
"The year 1918 was a banner year
for salaries and wages. and the high
war prices brought unusual profits
to the average small tradesman ana
to, the farmer. The opinion IN
Washington is that million citizens
and residents will make this year
their first income tax returns.
"All signs indicate that the income
tax this year will reach nearly e.
cry working man and woman. ana
nearly every merchant, shopkeeper
and farmer. Not all will have TO
pay the tax, but nearly all will be
Obliged to make sworn statement
of the years income.
Il am therefore advising every
unmarried person who earned
$1,000 or over during the year 1918,
and every married person, who TO-
gether with wife or husband, earned
$4,000. to sharpen his pencil and fig
ure out how he stands.
He must ascertain accurately ms
gross income from all sources. There
is his salary or his wages, includ-
ing overtime and any bonus re-
ceived as additional compensation.
A married person having children
under IS who are working should In
clude the earnings of such children.
If he sold any property at prot
it. the gain must be computed and
included in gross income. II he rent
ed any property to other person.
the total rents received in the year
must be ascertained. and from that
figure a deduction may be taken
for taxes paid on rented property,
the necessary minor repairs. fire IN
surance. any interest he may have
paid on the mortgage. and reas-
enable allowance for annual wear
and tear of the rented property
The balance is included in gross
income for the year
Interest on bank deposits, wheth-
err withdrawn or added 10 his bank
balances. must be included in all
calculations of income. Bond inter
est 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 Lib
erty bonds, however, should ask
their bankers to write 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 DIS
tributions made by domestic corpo-
rations.
"A person buying and selling mer-
chandise must find his profits for the
year on the following basis: First,
ascertain the gross sales or the total
cash receipts, then add together the
inventory at the beginning OF the
year and the purchases of goods
for resale. From this latter sum sub
tract the inventory of goods on hand
at the years end, and the result Is
the cost of goods sold. This cost,
plus necessary expenses incurred
solely through conduct OF the busi-
ness, 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 ascertain
ing the total of fees for services ana
deducting therefrom all expenses
connected directly and solely with
his practice.