The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-02-05
1921 lntu!lc Tax Facts You Should
k now.

=, thc sdlarird on professional man
Whose plincipui source OF income is
payment for professional services the
problem OF making out an income tax
fctL n Is not rs great as that pre-
senteu 10 The owner of business In
the case OF At merchant, manufacture
cr. or any business in which pro-
duction, purchase, or sale OF mer-
chandisc is an incomc-producing fac
TOR, inventories are necessary at the
beginning OF each fiscal or CALENDAR
year, according to the taxpayers n
method OF accounting. The fiscal year
~ an accounting period OF IL months
ending on the last day of any month
other than December. Taxpayers
who Keep their books on fiscal
year basis are required to make their
returns on that basis.
The inventory should include raw
material and supplies on hand that
ha|t been acquired Tor sale or use in
!icduNtlon, Together with all finished
or plttly finished goods. Ii should
ihcluGe merchandise sold but not
billed To the customer ut the date OF
inventory and any goods out upon
consi9nInclit unless such goods have
been included In the sales for the
taxable year. IL should also include
merchandise purchased though not
actually received to which title has
passed to the purchaser.
Cost or Market.
inventories may be taken either on
the basis OF cost or cos. or rnarlee [
value. whichever Is lower. In the Gaze
OF merchant cost" means the in
voice price less trade or other dis
counts. excepting strictly cash dis
counts apprOximating a fair rate Of
interest, which may be. deduc,ed or
no. at the option of the taxpayer pro-
viding a consistent course is followed.
To the net invoice price should be
added the cost OF transportation and
other necessary charges incurred In
acquiring possession OF The goods. +,
In the case Of manufacturers
cost" means the cost OF raw mate
rails and supplies. expenditures for
labor, and indlre:. costs incident to
production, including Il reasonable
proportion OF management expenses,
but not including any cost OF selling
or securing roturn on capital.
Market" means the current bid
price prevailing at the date OF the i'll
yentory FOR thc particular merchan-
disc. The burden OF proof as to the
correctness OF TIE prico rests upon the
taxpayer in each case. Ii the cost
OF market" basis is used. each class
OF goods must be itemizcd and the
cost or market price Of each shown
separately. The value Of each item
i'll the inventory may be measured
by cost or market, whichever is low
er. An entire stock may not be In =
ventoried at cost and also at marke.
price. and the lower OF the two in
",ntorie6 used
No special system OF accounts is
rrescribcd by the bureau OF internal
revenuc, but ne books must show in
"ctdIl inventories. purchases, sales,
capital, invest t.ncnts, and similar items;
required in making up an income taN
F"torn Tho inventory, which can
not be taken without some form OF
acc >untS, is the compass Of q bust
r"SS. without t. the direction in
which the business il heading, either
cor success or failure, can not be de-
tcrmincd.
Taxable Income.
In the making OF an income tax re-
turn for the year 1920. taxpayers Of
every class. business and profession
III man wag" carners. and farmers.
should present 10 themselves for con =
sidcration the following questions:
'id you receive any interes. on
bank deposits?
Have YOU any property from which
you receive ronip
Did you receive any income in the
form of dividend or interest from
stocks or bonds?
Did You receive any bonuses during
the year?
Did you make any profit on .hc sale
Of stocks. bonds, etc?
Did YOU act az a broker in any
trah.act!0n from which you received
commissions?
Arc YOU intcrcS. cd i'm any partner
snip or Othe" firm from which you re-
ceivc any income?
Have YOU any income from royal-
tics or Ea ents?
Have you amy minor children who
are working?
Have YOU control of the earnings of
such children? lf so. the amount
must be included i'm the return Of in
come.
Has your wife any income fro!a
any source Whatsoever? If so, it must
be included in your return or reported
in scpara'c return of income.
Did you .'cceiVc any directors fees
or trrs.ccs' lees In the course OF tn.
year?
DO ycu hold any Office in beneG,
society from which you receive in
come?
Answers to all OF these questions
are necessary TO determine whether a
taxpayer has net income sutticien ~
large 10 require that he file a return
If single, or II married and not living
with Wife. and his income for 1922
was 81 200 or more. he mus. make a
return regardless OF whether his in