Richmond Palladium (Daily), Volume 45, Number 71, 3 February 1920 — Page 3

THE RICHMOND PALLADIUM AND SUN-TELEGRAM, TUESDAY, FEB. 3, 1920.

PAGE THREE

PROFESSIONAL MEN ARE TOLD HOW TO FIGURE INCOME TAX

Figuring income tax is an easy job for the professional man. By education, and training he is accustomed to drawing up statements. He has records of transactions involving income, and keeps well in touch with his expenditures. Just what he is allowed to deduct as a 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 ar

ticle. Returns for 1919. The present income tax law requires that returns be filed on or before March 15, 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 return if his or her net income was $1,000, or over; and a married person living with wife (or husband) must file if their Joint net income was $2,000 a year or over. A widow or widower, , or a married person living apart from wife (or husband) is classed as a single person. The requirement to file a federal income tax return is not contingent upon there being a tax due. Form 1040 A is used for net income of not more than $5,000. Form 1040 for net income over $5,000. Instructions and a working sheet accompany each return form. Every firm of professional men operating as a corporation must make an annual return of net income on Form 1120; if operating as a partnership, a return on Form 1065 must be filed. Gross Income. An individual's gross income from a profession includes all compensation for his services. When services are paid for with something other than money the fair market value of the thing taken in payment is the amount to be included as income. If the services were rendered at a stipulated price, in the absence of evidence to the contrary, such price will be presumed to be Ihe fair value of the compensation received. In the case of a salary received, this should be shown separately, in Block B, of the return. Many professional men and women lawyers, medical To Cure a Cold in One Day Take LAXATIVE QUININE (Tablets.) It stops the Cough and Headache and works off the Cold. E. W. GROVE'S signature on each box. COc.

examiners, teachers, accountants, etc., are officers or employes of a state or a political subdivision of a state, such as a city, town or county. Their salaries or wages as such officers or employes is exempt from the federal Income tax. The exemption also applies to fees received by notaries public commissioned by states, also the commissions of receivers appoint

ed 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 included when they accrue to him in accordance with an approved method of accounting followed by him. A professional man may make his return on the basis of cash intake and actual expenditures for the year. It

should be noted here that a taxpayer is deemed to have received income which has been credited to or set apart for him without restriction. Accrual Basis A more exact and equitable method of figuring net income is on the 'accrual basis". This means a computation on the basis of income earned and expenses incurred, whether paid or not, that actually pertain to the taxable year, excluding income earned and expenses incurred in previous or succeeding years. A professional man who keeps books of account should make returns by this method, if his accounting method is one generally employed, and shows a correct net income. Deductions A professional man may claim as deductions the cost of supplies used by him 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 and subscriptions to professional journals, the rent paid for office room, the expense of the fuel, light, water, telephone, etc., used in such offices, and the hire of offifce assistants. Amount expended for books, furniture and professional instruments and equipment of a permanent character are not allowable as deductions. In the deductions from gross income, the law specifically bars personal living or family expenses. In the case of a professional man who has a regular place of business and who rents a residence, but inci-

dentally receives there clients, pat

ients or callers in connection with his professional work, no part of the rent at his home is deductible. If, however, he uses part of the house for his office, such portion of the rent as is properly attributable to such office is deductible.

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The uncollectible bills of professional men, particularly doctors, dentists and lawyers, have a very important bearing on the net earnings for each year. The principal point in connection with such accounts made in income tax procedure is that there can be no such allowance for bad debts in returns figured on the "cash basis". That is, a person who has been making his annual returns on the basis of cash received' and actual cash expenditures each year has never shown as income his accounts with patients or clients, and Is, therefore, not entitled to take them out of income. On the other hand, a person who annually figured his gross Income on

the "accrual basis", that Is, included his cash receipts and charges against patients and clients for all of his ser

vices performed during each year, is

entitled to a deduction for "bad debts"

covering such accounts as he ascertained during the year were uncollectible and charged off on his books.

An account merely written down or

a debt known to be worthless prior to the beginning of the taxable year is

not a proper item for deduction.

Wear and Tear A reasonable allowance for the wear and tear and obsolescence of such instruments and equipment, etc., is allowed. The proper allowance is that amount which should be set aside for the taxable year in accordance with a consistent plan by which the total of such amounts for the useful life of the property will suffice, with the salvage or scrap value, at the end of such useful life, to provide in place of the property will suffice, with the salvage or scrap value, at the end of such useful life, to provide in place of the property its cost or its value as of March 1, 1913, if acquired by the taxpayer before that date. Obsolescence When through some new invention, or radical change in methods, or similar circumstances the usefulness in his profession of some or all of his instruments or other equipment is suddenly terminated, so that he discards such assets permanently from use, he may claim as a loss in that year th difference between the cost (reduced by reasonable adjustment for wear and tear, which it has undergone) and its junk or salvage value. If the apparatus was owned prior to March 1, 1913, its fair market value on that date should be considered, instead of its cost, in figuring obsolen-

TO fifARD AGAINST IXFL.CENZA Don't let the dread influenza get you. Tf you have even the slightest coutrh or cold, better begin using Foley's Honey

and Tar at once. Henry Willis, SandyPoint. Texas, is one of many thousands who consider this remedy "just fine." i He says: "I suffered severely with a 'bad cough; after using four or five i dollars' worth of different medicines, decided to try Foley's Honey and Tar. One bottle gave relief. Best medicine 1 1 ever used." Contains no opiates. For ; sale by A. G. Luken & Co. Advertise- . ment.

cence. This deduction Is allowed by low. but the taxpayer must be able to I

substantiate any claim made on this basis.

Two are Arrested for Non-Support In Oxford OXFORD, Ind Feb. 3 Marion Lewis, 25, and Arthur Suel, 24, colored, were before Mayor Hughes yesterday charged with abusing their families. According to the testimony both men have been amusing themselves recently by beating their wives. They were fined $50 and costs eaach, and immediately afterwards arrested by Humane Officer Fiuley upon the charge of non-support. They wil be taken to Hamilton for trial upon the latter charges. Blickensderfer Dead. Jesse Blickensderfer yesterday received word from Hackensack, N. J., announcing the death of his son, Rev.

Robert R. Blickensderfer, rector of Christ church, Hackensack. The young man was 33 years of age, and was graduated from Miami University in 1917. Opera Is Release.'. IJHJ The Arion choir, .,i .,ai university, composed of 100 young men and women, is rehearsing a new opera by Prof. J. W. Clokey, of the music department, entitled, "The Pied Piper of Hamlin." Miss Cyrena Van Gordon, of the Chicago Grand Opera company, has been engaged to sing the leading role. Two performances of the opera will be given in the- spring, with special scenery and costumes, a ballet and children's chorus from the William McGuffey schools. To Talk on Burns. Mrs. Frances Gibson Richard, of the English department of Miami University, will deliver an address on "Robert Burns" before the College Women's club this evening. The talk will be interspersed with vocl selections by Miss Emma Cone, who will sing several of Burn's lyrics. David Jastrow, proressor of psychology. University of Wisconsin, delivered a lecture last evening in Miami university auditorium. His subject was, "How Does Human .Nature improve."

ANNOUNCEMENT We are pleased to call especial attention to the appointment of The E. W. Steinhart Company as our representative in and for Wayne County, Indiana The E. W. Steinhart Company is now located in their new building; on Tenth Street near Main and offers to the motoring public of Wayne County a sales and service organization second to none in the territory served. , CHEVROLET MOTOR COMPANY FLINT, MICHIGAN

Guy S. Means, Manager.

Telephone 2955

F a M 1

Our Great Silk and Muslin

Underwear Dept.

with its beautiful display beckons you come, see what we have gathered. As never before we are ready ready with a truly matchless gathering together of exquisitely soft, dainty, fluffy undermuslins of purest whiteness and daintiest pinkness, beautifully finished and perfectly made under the most sanitary conditions, offered at prices which, notwithstanding the difficulties of merchandising now will compare favorably with the prices of former years.

High neck and long sleeve Gowns in Long Cloth, Cambric, Muslin and Crepe. Emb. trimmed; prices $2.50 to $4.00 ea. Slip-over and kimono style Gowns, made up in Nainsook, Long Cloth, white and flesh Batiste and Crepe. Trimmed with laces, embroideries, headings and ribbon ; prices ranging from $2.50 to $5.00 Hand embroidered Porto Rican and Philippine Gowns ; prices from $4.00 to $6.00 A large assortment of extra sizes in various styles. Envelope Chemises in white and flesh color Batiste, round neck and camisole styles, trimmed with laces, headings and ribbon; prices ranging from $1.98 to $5.00 each. Hand embroidered Philippine Chemises from $3.50 to $6.00

jj'05 Ladies' Drawers in straight, circular and

Marcella styles, Muslin, Long Cloth, Nainsook and Batiste ; lace and embroidery trimmed, both regular and extra sizes; ranging in price from $1.50 to $3.00 a pair. Ladies' Bloomers in white and flesh color, Crepe and Batiste; prices from $1.50 to $2.50 Nainsook Corset Covers in round neck and camisole styles, trimmed with laces, embroideries, medallions and ribbon; prices from $1.00 to $5.00 each.

-Ladies' Antoinette Garments, a combination brassiere top and envelope drawers, both white and flesh color; prices $2.50, $3.00 and $4.00. Sizes 38 to46. -Ladies' golf and short white skirts from 98c to $4.00 each.

Ladies' white Cambric Skirts, both regular and extra sizes, made up of nainsook and fine long cloth, beautifully trimmed with laces, insertions, beading and ribbon ; ranging in price from $2.50 to $6.00 Sleeping Garments, 2-piece Pajamas and "Billie Burke" styles in white and flesh Batiste, embroidered in tinted designs, Windsor Crepe in white and flesh color. Witchery Crepe in pink, blue, lavender and nile green. 2-piece Pajamas in Soiesette. Crepe and Madras; prices from $3.00 to $4.50; sizes 38 to 44. Crepe de Ch'ine, Silk Batiste and Wash Satin Gowns ; prices from $5.00 to $14.00 Crepe de Chine and Wash Satin Envelope Chemises from $3.50 to $7.50 each. Crepe de Chine and Satin Bloomers, H. S. and lace ; prices $4.50 and $5.00 Pink Wash Satin "Step-in" style at $6.00 White and flesh Wash Satin Petticoats from $6.50 to $10.00 Corset Covers and Camisoles in Flesh and Wash Satin; prices from $1.50 to $5.00 each. Fancy Ribbon Camisoles, navy blue and brown Satin Camisoles, ribbon combination and hand embroidered ; prices from $3.00 to $5.00 each. A complete line of Misses and Children's Muslin Under Garments DRAWERS , KNICKERBOCKERS BLOOMERS HIGH NECK GOWNS SLIP-OVER GOWNS BISHOP STYLE GOWNS PRINCESS SLIPS COMBINATION SUITS "BILLIE BURKE" SLEEPERS "BILLIE BURKE" PAJAMAS BOYS' NIGHT SHIRTS

See the display in the center window Department 2nd Floor Annex

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f3F less ttflaainL a Cesafc

Freight rates have played a very small part in the rising cost of living.

A given unit of any commodity will buy more transportation now than it ever did before in the history of the country. A ton of 6teel or a bushel of wheat will buy more transportation now than ever before. WALKER D. HINES I Dlrtctor Cfntrol of Raitnadt

Other causes the waste of war, under-production, credit inflation have added dollars to the cost of the necessities of life, while freight charges have added only cents. The average charge for hauling a ton of freight a mile is less than a cent. A suit of clothing that sold for $30 before the war was carried 2,265 miles by rail from Chicago to Los Angeles for 16V cents. Now the freight charge is 22 cents and the suit sells for $50. The cost of the suit has increased 20 dollars.

The freight on it has increased only 54 cenfs. Other transportation charges enter into the cost of the finished article carrying the wool to the mills and the cloth to the tailors but these other charges amount to but a few cents more. The $10 pair of shoes that used to sell for $5 goes from the New England factory to the Florida dealer for a freight charge of 5 cents only one cent more than the pre-war rate. Beef pays only two-thirds of a cent a pound freight from Chicago to New York. American freight rates are the lowest in the world. Ifiis advertisement is published by the 2ssociation of Slailway Executives Those desiring information concerning the railroad situation may obtain literature by writing to The Association of Railway Executives, 61 Broadway, Xew York