The Lambertville record. [volume] (Lambertville, N.J.) 1872-1968, 1923-02-23
Income Tax Facts
INCOME TAX FACTS NO. 3

The revenue act of 1921 provides
that an income tax return shall be
filed by every person, married or sin
gle, whose gross income for the year
1922 was $4,000 or more. Broadly
speaking, gross income received by
the taxpayer during the year from
salary or wages, or from business,
trade, profession or VOCATION deal
ing in property, or the transaction
of any business carried on for profit.
Net income, upon which the tax is
assessed, is gross income less certain
specified deductions for business ex-
penses, losses, bad debts, taxes, con
tributions, etc.
Among the most important items in
the returns of many taxpayers are
the deductions for business expenses.
In the case of storekeeper, they in
clude a reasonable allowance for sa
laries paid employees, amounts spent
for advertising, premiums for insu-
rance against fire or other business
losses, the cost of water, light heat
and fuel used in his place of business,
drayage and freight bills.
A professional man, doctor or law
yer, may claim as deductions the cost
of supplies used in the practice of
his profession, expenses paid in the
operation and repair of an automobile
used in making professional calls,
dues to professional societies, sub
scriptions to professional journals,
office rent, and the cost of fuel, light
heat and water used in his office, and
the hire of assistants.
farmer may deduct all amounts
paid in the production, harvesting and
marketing of crops, including labor,
cost J seed and fertilizer purchased,
cost Of minor repairs to farm build
ings (other than the dwelling. which
is personal eWpense) and cost of small
tools used up in the course of a year
or two. Rent paid for a farm also is
an allowable deduction
Deduction of personal or living ex
penses such as rent paid for dwell
ling, hire of domestic servants, edu-
cations of children, etc, is expressly
disallowed by the revenue act.
INCOME TAX FACTS NO. 4
In making out his income tax re-
turn for the year 1922, the taxpayer
is required to include all items of
gross profits on sales, together with
income from other sources. The re-
turns must show the gross sales, pur-
ehases, and cost of goods sold To re-
fleet net income correctly, and to as
certain gross income, inventories are
ordinarily required as of the begin
ming and end of each taxable year.
The professional man, doctor, law
yer. dentist, must include all fees and
other compensation for professional
services.
The farmer is required to report
as gross income all profits derived
from the sale or exchange of farm
products, including cqops and live
stock, whether raised on the farm OF
purchased and resold. A farmer who
rents his farm on the crop sharing
basis must report such income for
the years in which the crops are sold.
Profit obtained from the sale or rental
of farm lands also must be reporte /.
In order that they may obtain full
advantage of the deductions from
gross income to which they are en-
titled, taxpayers are advised by col
lectors of internal revenue to study
carefully the instructions on the forms
from making returns under the head
"Income from Business or Profess
sion "