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Assessment 4 Tax 1

Mr. Cruz had a net pay of P427,000 in 2019 and owed P36,750 in income taxes. Pedro had a taxable income of P750,000 from his self-employment in 2020 and owed P117,500 in taxes. If he used the optional standard deduction, his taxable income would be P2,000,000 and he would owe P490,000 in taxes. Using the 8% optional tax rate, he would owe P160,000. Mr. Dy had a taxable income of P1,000,000 from compensation and business activities in 2018. Using itemized deductions, he owed P210,000 in taxes. Using the 8% optional tax

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Judy Ann Gaceta
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2K views3 pages

Assessment 4 Tax 1

Mr. Cruz had a net pay of P427,000 in 2019 and owed P36,750 in income taxes. Pedro had a taxable income of P750,000 from his self-employment in 2020 and owed P117,500 in taxes. If he used the optional standard deduction, his taxable income would be P2,000,000 and he would owe P490,000 in taxes. Using the 8% optional tax rate, he would owe P160,000. Mr. Dy had a taxable income of P1,000,000 from compensation and business activities in 2018. Using itemized deductions, he owed P210,000 in taxes. Using the 8% optional tax

Uploaded by

Judy Ann Gaceta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Gaceta, Judy Ann M.

BSA-3B

Assessment Task 4
Income Tax Computation
1. Mr. Cruz received the following income from his employment in 2019.
Gross salaries P 520,000
Deduction for:
SSS P 10,000
Philhealth 8,000
Pagibig 7,000
Union dues 3,000
Loan Repayment 50,000
Tardiness and absences 15,000
Net pay P 427,000
1a. Compute for the taxable compensation income of Mr. Cruz and the corresponding
tax due in 2018.
Answer:
Taxable Compensation Income P 427, 000
Tax due:
On P 400, 000 P 30, 000
On excess (P 427, 000 – 400, 000) x 25% 6, 750
Total tax due P 36, 750

2. Pedro , a self-employed with ten dependent children, had the following items of income
expenses in 2020:
Gross receipts P 2,600,000
Direct cost of services 1,250,000
Allowable business expenses 600,000
2a. Compute for the taxable income of Pedro and the corresponding tax due in 2020.
2b. Compute the taxable income if Pedro opted to use the optional standard deduction.
2c. Compute the income tax due if Pedro opted to use the 8% optional income tax.
Answer:
Gross Receipts P 2, 600, 000
Less: Direct cost of services 1, 250, 000
Gross Income P 1, 350, 000
Less: Allowable business expense 600, 000
Taxable net income P 750, 000

Tax due:
On 400, 000 P 30, 000
On excess ( P 750, 000 – 400, 000) x 25% 87, 500
Total tax due P 117, 500
Taxable net income P 750, 000
Multiplied by: Income tax rate 8%
Tax due P 60, 000

OOOOOOR!!

Gross receipts P 2, 600, 000


Less: Allowable business expense 600, 000
Taxable income P 2, 000, 000

Tax due:
On 800, 000 P 130, 000
On excess (P 2, 000, 000 – 800, 000) x 30% 360, 000
Total tax due P 490, 000

Taxable income P 2, 000, 000


Multiplied by: Income tax rate 8%
Tax due P 160, 000

3. Mr. Lorenz Dy, a mixed income earner , had the following data for the taxable year 2018
Compensation income P 820,000
Mandatory payroll deductions 20,000
Sales 1,800,000
Cost of Sales 500,000
Allowable business expenses 300,000
3a. Compute for Mr. Dy’s taxable income and tax due assuming he opted to use the
Itemized deduction.
3b. Compute for Mr. Dy’s’ taxable income and tax due assuming he opted to use the 8%
optional income tax.
Answer:
Compensation income P 820, 000
Less: mandatory payroll reductions 20, 000
Taxable compensation income P 800, 000

Sales P 1, 800, 000


Less: cost of sales 500, 000
Gross income P 1, 300, 000
Less: Allowable business expenses 300, 000
Taxable net income P 1, 000, 000

On P 400, 000 P 30, 000


On excess (P 800, 000 – 400, 000) x 25% 100, 000
Tax due on compensation income P 130, 000

Taxable business income P 1, 000, 000


Multiplied by: Income tax rate 8%
Tax due on business income P 80, 000
Total tax due P 210, 000

Ooor!

On P 800, 000 P 130, 000


On excess (P 1, 000, 000 – 800, 000) x 30% 60, 000
Tax due on business income P 190, 000
Total tax due P 320, 000

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