a gross compensation income of Php1,000,000 for the whole Assuming that he is th
ID: 2567909 • Letter: A
Question
a gross compensation income of Php1,000,000 for the whole Assuming that he is the one year of 2012. He is with six children. claiming (not his wife) the tax exemption for the children, how much total income tax was withheld from his salary for the year 2012? 2. Joe is 18 years old and is dependent on his sister Mary for financial support. If Mary is the head of the family, how much tax should Mary pay the government 3. Dennis purchased a spare part from RAPIDE for his auto repair shop. The spare 4. From #3 auto repair shop's point of view, should the VAT be declared as an input 5. Mario is single and earns a monthly gross income of Php20,000 from his first job (BIR) if she e is earming a gross annual compensation income of Php450,000? eaming part cost Dennis Php650 VAT inclusive. How much VAT did Dennis absorb? or output VAT? How much annual income tax should Mario pay to the govemment?Explanation / Answer
Please note: Calculations as per Bureau of Internal Revenue guidelines and Compensation tables.
1) Basic personal expense of P50,000 is an mandatory deduction allowed to individual citizens in Philippines and also additional personal exemptions for a Qualified depended child of P25,000 each not exceeding four (4) children i.e maximum of P100,000 is allowed as deduction.
Total Deduction = P50,000+ P100,00 = P150,000
Annual gross compensation is 1,000,000
Less: Basic Personal expense -50,000
Less: additional personal exemptions -100,000
Net Annual Compensation P850,000
Regular compensation: P 70,833.33
Less: compensation level
(As per BIR Tax table) - 54,167
Excess P 16,666.33
Total P 16,666.33
Tax on P 51,167 P 10,416.87
Tax on excess (P16,666.33 x 32%) 5,333.22
Withholding tax January for 2012 P 15,749.89
With holding tax for 12 months = P15,749.89*12 = P188998.77
Taxable
Professionals with their income less than P720,000.00, we withheld 10% if over 720k, it is 15%
2) If Mary is the head of the of the family and if she (Mary) claims her sister as dependent who is less 21 years of age, needs to be legally adopted to claim deduction as a Qualified depended child.
Assuming Mary is not legally adopted Joe as her dependent, below are Mary's Tax paid details to government.
Annual gross compensation is 450,000
Less: Basic Personal expense -50,000
Net Annual Compensation P400,000
Regular compensation: P 33,333.33
Less: compensation level
(As per BIR Tax table) -25,000.00
Excess P 8,333.33
Total P 8,333.33
Tax on P25,000.00 P 4,166.67
Tax on excess (P8,333.33 x 30%) 2,500.00
Withholding tax for 2012 P 6,666.67
Tax for 12 months = P6,666.67*12 = P80,000.04
3) Tax VAT rate would be 12% i.e = P650/1.12 = P 580.35
Vat = P650-580.35 = 69.6
Vat = 69.6
4) Since this purchase of goods hence VAT is declared Input VAT.
5) Regular compensation: P 20,000
Less: compensation level
(As per BIR Tax table) -15,833
Excess P 4,167
Total P 4,167
Tax on P15,833 P 1,875.00
Tax on excess (P4,167 x 25%) 1,041.75
Withholding tax for 2012 P 2,916.75
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