The Manchester journal. [volume] (Manchester, Vt.) 1861-current, 1920-02-12
THE PROFESSIONAL
MANS INCOME TAX

Figuring Income Tax is an easy JOB
Tor the professional man By ednca
ton and training he is accustomed q
drawing up statements. He has
records Of transactions involving in.
come, and keeps well in touch with his
expenditures.
Just what he is allowed to deduct as
professional expense, in figuring his
net income, is what he wants TO know
each year as the tax season arrives
Therefore, a review Of the items in
general is given in this article
Returns for 1919
The present income tax Law requires
that returns for 1919 be fled on or be-
fore March 18th, 1920, At the Office Of
the Collector Of Internal Revenue for
the district in which the taxpayer
lives At least one quarter Of the tax
due must accompany the return.
An unmarried person must file a re-
turn if his or her net income was
81 900 or over; and married person
living with wife Tor husbandl must
file if their joint net income was $4,000
or over. A widow or widower, or a
married person living apart from wife
Cor husband) is classed as a single
person.
The requirement to file a Federal
Income Tax return is not contingent
upon ther being a tax due.
Form 1040-A is used for net income
Of not more than $4,000; Form 1910 for
net income over $4,000. Instructions
and working sheet accompany each
return form.
Every firm or professional man OPP
Grating as a corporation must make an
annual return of net income on Form
1l20; if operating as partnership,
return on Form 1865 must be fled
Gross Income
An individuals gross income from
profession includes all compensation
for his services.
Where services are paid for with
something other than money, the fair
market value Of the thing taken in
is the amount to be included
as income. II the services were rem
dered at stipulated price, in the alb
sence of evidence TO the contrary such
price will be presumed to be the fair
value of the compensation received.
In the case Of salary received, this
should be shown separately, in Block
b, of the return. Many professional
men and women-lawyers, medical ex
aminers, teachers, accountants, etc.
are officers or employees of a State, or
a political subdivision of State, such
as city, town or county. Their salaries
or wages as such officers or employees
is exempt from the Federal Income
Tax. The exemption also applies to
fees received by notaries' public COM
missioned by States, also the commits |
sions Of receivers appointed by State
courts.
As to fees for services to clients, |
patients, etc, these should be included
IN the gross income for the taxable
year in which received, unless they are
when they accrue to him in
with an approved method
If accounting followed by him.
Cash Basis
A professional man may make his
.eturn on the basis of cash intake and
actual expenditures for the year. 1t
should be noted here that taxpayer
S deemed to have received income
which has been credited to or set apart
or him without restriction.
Accrued Basis
A more exact and equitable method
II figuring net income is on the
accrued basis" This means a COM
lutation on the basis of income earned
md expenses incurred, whether paid
n not, that actually pertain to the
axable year, excluding income earned
md expenses incurred in previous or
years. A professional man
Who keeps books of accounts should
make returns by this method, if his
method is one generally
and shows a correct net in
,ome.
Deductions
A professional man may claim as de-
auctions the cost Of supplies used by
i'm in the practice Of his profession,