Form 1040 - Return Of Annual Net Income Of Individuals

INSTRUCTIONS.

1. This return shall be made by every citizen of the United States,

11. The farmer, in computing the net income from his farm for

whether residing at home or abroad, and by every person residing

his annual return, shall include all moneys received for produce and

in the United States, though not a citizen thereof, having a net income

animals sold, and for the wool and hides of animals slaughtered,

of $3,000 or over for the taxable year, and also by every nonresident

provided such wool and hides are sold, and he shall deduct therefrom

alien deriving income from property owned and business, trade, or

the sums actually paid as purchase money for the animals sold or

profession carried on in the United States by him.

slaughtered during the year.

2. When an individual by reason of minority, sickness or other

When animals were raised by the owner and are sold or slaugh-

disability, or absence from the United States, is unable to make his

tered he shall not deduct their value as expenses or loss. He may

own return, it may be made for him by his duly authorized repre-

deduct the amount of money actually paid as expense for producing

sentative.

any farm products, live stock, etc. In deducting expenses for repairs

on farm property the amount deducted must not exceed the amount

3. The normaI tax of 1 per cent shall be assessed on the total net

actually expended for such repairs during the year for which the

income less the specific exemption of $3,000 or $4,000 as the case

return is made. (See page 3, item 6.) The cost of replacing tools or

may be. (For the year 1913, the specific exemption allowable is

machinery is a deductible expense to the extent that the cost of the

$2,500 or $3,333.33, as the case may be.) If, however, the normal

new articles does not exceed the value of the old.

tax has been deducted and withheld on any part of the income at

the source, or if any part of the income is received as dividends

12. In calculating losses, only such losses as shall have been

upon the stock or from the net earnings of any corporation, etc.,

actually sustained and the amount of which has been definitely

which is taxable upon its net income, such income shall be deducted

ascertained during the year covered by the return can be deducted.

from the individual’s total net income for the purpose of calculating

13. Persons receiving fees or emoluments for professional or other

the amount of income on which the individual is liable for the normal

services, as in the case of physicians or lawyers, should include all

tax of 1 per cent by virtue of this return. (See page 1, line 7.)

actual receipts for services rendered in the year for which return is

4. The additional or super tax shall be calculated as stated on

made, together with all unpaid accounts, charges for services, or

page 1.

contingent income due for that year, if good and collectible.

5. This return shall be filed with the Collector of Internal Revenue

14. Debts which were contracted during the year for which return

for the district in which the individual resides if he has no other

is made, but found in said year to be worthless, may be deducted

place of business, otherwise in the district in which he has his

from gross income for said year, but such debts can not be regarded

principal place of business; or in case the person resides in a foreign

as worthless until after legal proceedings to recover the same have

country, then with the collector for the district in which his principal

proved fruitless, or it clearly appears that the debtor is insolvent. If

business is carried on in the United States.

debts contracted prior to the year for which return is made were

included as income in return for year in which said debts were

6. This return must be filed on or before the first day of March

contracted, and such debts shall subsequently prove to be worthless,

succeeding the close of the calendar year for which return is made.

they may be deducted under the head of losses in the return for the

7. The penalty for failure to file the return within the time specified

year in which such debts were charged off as worthless.

by law is $20 to $1,000. In case of refusal or neglect to render the

15. Amounts due or accrued to the individual members of a

return within the required time (except in cases of sickness or

partnership from the net earnings of the partnership, whether appor-

absence), 50 per cent shall be added to amount of tax assessed. In

tioned and distributed or not, shall be included in the annual return

case of false or fraudulent return, 100 per cent shall be added to

of the individual.

such tax, and any person required by law to make, render, sign, or

verify any return who makes any false or fraudulent return or

16. United States pensions shall be included as income.

statement with intent to defeat or evade the assessment required by

17. Estimated advance in value of real estate is not required to

this section to be made shall be guilty of a misdemeanor, and shall

be reported as income, unless the increased value is taken up on the

be fined not exceeding $2,000 or be imprisoned not exceeding one

books of the individual as an increase of assets.

year, or both, at the discretion of the court, with the costs of

18. Costs of suits and other legal proceedings arising from ordi-

prosecution.

nary business may be treated as an expense of such business, and

8. When the return is not filed within the required time by reason

may be deducted from gross income for the year in which such costs

of sickness or absence of the individual, an extension of time, not

were paid.

exceeding 30 days from March 1, within which to file such return,

19. An unmarried individual or a married individual not living

may be granted by the collector, provided an application therefor is

with wife or husband shall be allowed an exemption of $3,000. When

made by the individual within the period for which such extension

husband and wife live together they shall be allowed jointly a total

is desired.

exemption of only $4,000 on their aggregate income. They may make

9. This return properly filled out must be made under oath or

a joint return, both subscribing thereto, or if they have separate

affirmation. Affidavits may be made before any officer authorized

incomes, they may make separate returns; but in no case shall they

by law to administer oaths. If before a justice of the peace or

jointly claim more than $4,000 exemption on their aggregate income.

magistrate; not using a seal, a certificate of the clerk of the court as

20. In computing net income there shall be excluded the compen-

to the authority of such officer to administer oaths should be attached

sation of all officers and employees of a State or any political

to the return.

subdivision thereof, except when such compensation is paid by the

10. Expense for medical attendance, store accounts, family

United States Government.

supplies, wages of domestic servants, cost of board, room, or house

rent for family or personal use, are not expenses that can be deducted

from gross income. In case an individual owns his own residence he

can not deduct the estimated value of his rent, neither shall he be

required to include such estimated rental of his home as income.

Form 1040 - Return Of Annual Net Income Of Individuals - 1913 Page 4

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