18 



The Florists^ Review 



February 19, 1914. 



HAVE YOU TOLD UNCLE 

 SAM ABOUT YOUR INCOME? 



Flourishing Florists must file their income tax returns be- 

 fore Monday, March 1, or pay a fine of from $20 to $1000 



list K* 



- District of . 



ttliriunti- 



I HIS article will not be of 

 interest to any florist who 

 cleared less than $2,500 in 

 the last ten months of 1913, 

 but to those who are liable 

 to the new income tax, and 

 who have not yet done anything about 

 it, this hint will be timely. The neg- 

 ligent are liable to fine after March 1. 

 The fine can not be less than $20 and it 

 may be as much as $1,000. 



The law will hit a lot of florists, and 

 it will prove more than the work of a 

 few moments to prepare a return that 

 will give the taxpayer the benefit of his 

 legal exemptions and at the same time 

 stand the scrutiny of those who look 

 out for the government's interests. 



Who Must Make Bettims. 



If you have already obtained from 

 the collector of internal revenue in your 

 district a blank for making the return, 

 designated as Form 1040, you will have 

 seen that, like all oflicial documents, it 

 has an imposing front, but, for use, the 

 proper place to start is at 

 the back. On the fourth 

 page are instructions, and 

 the first paragraph states 

 that the return shall be 

 made by every citizen of, 

 and every person residing 

 in, the United States who 

 had a net income of $3,000 

 for the taxable year. But 

 as the taxable year of 1913 

 comprises only the last ten 

 months, from March 1 to 

 December 31, the law really 

 applies to all who had a 

 net income of $2,500 in the 

 last ten months of 1913. 



Read the instructions if 

 you want to; if you don't, 

 begin filling in page 2 at 

 once. 



The reproductions o f 

 pages of the return given 

 herewith show how A. F. 

 Lorist filled out his blank. 



How to Schedule. 



The only money this flo- 

 rist received as a "salary, 

 wage or compensation for 

 personal services" was $80 

 he received for contrib- 

 uting a weekly news-letter 

 to The Review and $40 for 

 some lectures he gave be- 

 fore women 's clubs, etc. 

 This makes a total of $120 

 on line 1. Referring to his 

 books, he finds the total re- 

 ceipts at his retail store 

 for the ten months were 

 $18,600. On some real es- 

 tate deals he made a profit 

 of $1,500, which is entered 

 with the business receipts 



on line 2. From the rent of the rooms 

 over his store he received $300 during 

 the ten months and this goes on the 

 next line. On the outskirts of the town 

 is a greenhouse plant in which he is a 

 silent partner; his share of the profits, 

 not the total receipts, of the concern 

 was $2,000. The $4,000 the partners 

 cleared on the greenhouses was expended 

 in the erection of new glass at the plant 

 and A. F. Lorist received none of the 

 profits, but the whole of his share, 

 $2,000, must be entered under the head 

 of "gains and profits derived from part- 

 nership business." 



Being a thrifty person, our taxpayer 

 has saved some money, which he in- 

 vested in bonds and mortgages. In the 

 ten months' period he received $600 in- 

 terest from these, but $50 of this was 

 bond interest that was taxed at source 

 after November 1. So he enters $50 

 on line 5 under the heading A and $550 

 under B. It was not long ago that a 

 neighbor who had moved to Canada in- 



ns rua in cmitnL 



rorm 1040. 



INCOME TAX 



rat rtaui i« lAW IMS nnm m 

 xm uias or rac csuictm cr 



Mnmu KVIIU M M MIMl 



HtKi I IS SM 10 tutoa. 



nM« 4 ) 



UNITED STATES INTERNAL REVENUE 



RETURN OF ANNUAL NET INCOME OF INDIVIDUALS. 



<Aa proTiii< by A«4 •< Qm%tm». ^nwj Octotar 1, It)*.) 



RETURN OF NET INCOME RECEIVED OR ACCRUED DURING THE YEAR ENDED DECEMBER 31. If 1 

 (nw TMi Ti*a itis. rxM «a»ch i. t* MCcant ii.) 



a.^.;^y^^^ 



rM bf (or for) . 



k Hit City, Tew: or Post Offia of 



1. UaoM Imcowv (we page 2, line 12) . 



terested him in a Canadian corporation, 

 in which he invested some money, from 

 which last year he received $200; this 

 finds a place on the next line. 



He received $60 last year as his share 

 of the income on certain real estate, 

 which, according to his father's will, 

 is not to be divided until two nephews 

 of the taxpayer, orphans before their 

 grandfather's death, shall be of age. 

 This $60 is entered on line 7 as his in- 

 come received from fiduciaries, the last 

 word being merely a long-winded legal 

 name for a trustee or executor. As in- 

 terest on his bank account he received 

 $40, which he enters on line 8, as the 

 source is not specified elsewhere on the 

 page. To the totals of the two columns, 

 A and B, he adds $120, which he re- 

 ceived from stock in a corporation 

 which paid a corporation tax last fall. 

 His gross income is therefore $23,540. 

 General Deductions Large. 



A. F. Lorist was required to put down 

 the total receipts from his business as 

 part of his gross income. 

 Now on page 3, under the 

 head of general deductions, 

 he enters first the expense 

 of carrying on his business. 

 Salaries, stock, running ex- 

 penses, etc., make, accord- 

 ing to his books, a total of 

 $14,200. He has several 

 notes and mortgages out 

 and pays on them interest 

 ,f g^.C^r-/^U^ amounting to $445. His 



nKiuaiir 



FihM: - 



Asussmtat List 



Pag4 



-^H9f y ^ gM# iWJ HC 



1 Gbhsbal DiDcmoiia (aec page S, lioa 7) . 



Sl Nbt Imnva . 



D«^tion» and «MMption« aJIcwcd in ctm^liic incMS M^«ct t« tiM mmaX tu af I ^ cant. 



4. DivideiMk asd net fmrniofi r«oeiT«d or aceniml, ol eorpom- 



tioCM, etc, labjccl to like tax. (Sa« fK« ^ tiaall) 



L Amoant of iocoma on which th« normal tax hai been d«doct«d 

 and irithbrld at th« aource. (S«e pafa Z, line 9, oolamn k\. 



A. SpoH6c exfinptioD of $:l,000 ot $4,000, i 

 (8«e loatnictionaSaDd 19) 



may ba. 



MA 



** 



oror 



Total tleductioiM and eieiDptiona. (Ilaoia 4, K, and S) . 



7. jr»^Aau^wooi(aj)n_which_tba_nornia1 laaof I perpent in u> be caiculalaJ. (Bee Inaomction 3). 



».... 



W4lL 



M_ 



5(>J:, 



m.M 



«> 



v^ 



Te9 



ki£ 



33 



^Z 



t. Whaa tb* Ml IlKomt ikoanl above aa llaa 3 ticaada S20,000, tka aMItlonal tai tlwraa* iiint ba calculated a< per Kbadale balowi 



last year's taxes were $280. 

 An automobile, on which he 

 did not have suflScient in- 

 surance to cover his loss, 

 was completely destroyed 

 by fire last August. The 

 loss, $700, is entered with 

 the preceding items under 

 general deductions. H e 

 tried to clean up his books 

 last fall and found $420 

 worth of debts which, 

 either by legal proceedings 

 or declarations of insolven- 

 cy on the debtors ' part, were 

 proved to be worthless. This, 

 with an allowance of $1,800 

 for wear and tear and de- 

 preciation of his property, 

 brought the total under 

 general deductions to 

 $17,845. 



Turning to that imposing 

 front page, our taxpayer, 

 after filling in his name and 

 address, enters the total of 

 page 2, $23,540, as gross in- 

 come and the total of page 

 3, $17,845, as general deduc- 

 tions. The difference, or 

 net income, is $5,695. The 

 $120 received from stock of 



