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Income Tax Calculation Guide

This document provides examples of income tax calculations for three taxpayer types: individual income tax payer computing taxes using itemized deductions, individual income tax payer using the 40% optional standard deduction, and a corporate income tax payer using the 40% optional standard deduction. It shows the basic formula for computing income tax payable including gross sales or receipts, cost of sales, allowable deductions, taxable income, applicable tax rates, exemptions, tax credits, and tax due. Formulas are provided for each taxpayer type with numeric examples.

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32 views4 pages

Income Tax Calculation Guide

This document provides examples of income tax calculations for three taxpayer types: individual income tax payer computing taxes using itemized deductions, individual income tax payer using the 40% optional standard deduction, and a corporate income tax payer using the 40% optional standard deduction. It shows the basic formula for computing income tax payable including gross sales or receipts, cost of sales, allowable deductions, taxable income, applicable tax rates, exemptions, tax credits, and tax due. Formulas are provided for each taxpayer type with numeric examples.

Uploaded by

ramosinducil05
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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FINALS FORMULA

Ramos, Lorenzo III I. 3M3 - Marketing Management

Basic Formula for Income Tax Payable


Gross Sales or Receipts
Less: Cost of Sales/Cost of Services
Gross Income -
Less: Allowable Deductions
Taxable Income -
Less: Of Excess Over
Tax Rate
Add: Exempt
Income Tax Due -
Less: Tax
Credits/Quarterly
Income Tax Payments
Income Tax Payable -

ITEMIZED DEDUCTIONS (COMPUTATION METHOD)


Gross Sales from
935,000.00
Business
Less: Cost of Sales 400,000.00
Gross Business Income 535,000.00
Less: Allowable
Deductions (in
compliance with the 215,000.00
requirements and
limits)
Operating Expenses with vouchers and
215,000.00
receipts
Operating Expenses without vouchers and
receipts
Utilities Expense
Trucking/Delivery Expense
20% Discount Granted to Senior Citizens and
Persons with Disability
Interest Expense from Loan
Business Tax Expense/License/Permits
Net Operating Loss Carry-over (NOLCO)
Bad Debts Expense
Depreciation Expense
Pension Contributions
Contributions to IATF for Healthcare System
and procurement of vaccine
Taxable Business
320,000.00
Income
Add: Gross
Compensation Income
Taxable Income 320,000.00
Less: Of Excess Over 250,000.00
Tax Rate 20%
Add: Exempt -
Income Tax Due 14,000.00

INDIVIDUAL INCOME TAX PAYER (ITP TAX COMPUTATION) - 40% Optional Standard Deductions
Gross Sales from
935,000.00
Business
Less: Cost of Sales Not Available
Gross Income 935,000.00
Less: Allowable
Deductions (40% OSD 374,000.00
or 40% of Gross Sales)
Taxable Business
561,000.00
Income
Add: Gross
Compensation Income
Taxable Income 561,000.00
Less: Of Excess Over 400,000.00
Tax Rate 25%
Add: Exempt 30,000.00
Income Tax Due 70,250.00

CORPORATE INCOME TAX PAYER (CORPORATE ITP TAX COMPUTATION) - 40% Optional Standard
Deductions
Gross Sales from
935,000.00
Business
Less: Cost of Sales 400,000.00
Gross Income 535,000.00
Less: Allowable
Deductions (40% OSD
214,000.00
or 40% of Gross
Income)
Taxable Income 321,000.00
Corporate Income Tax
25%
Rate
Income Tax Due 80,250.00
Tax Table (Sec. 24(a) RA 8424, as amend
₱250,000.00
Over P250,000.00 but not over P400,000.00
Over P400,000.00 but not over P800,000.00
Over P800,000.00 but not over P2,000,000.00
Over P2,000,000.00 but not over P8,000,000.00
Over P800,000.00
Individual ITP
Corporate ITP
A 8424, as amended by R.A. 10963)
Exempt
₱0.00 20% ₱250,000.00
₱30,000.00 25% ₱400,000.00
₱130,000.00 30% ₱800,000.00
₱490,000.00 32% ₱2,000,000.00
₱2,410,000.00 35% ₱8,000,000.00
40% Gross Sales or Receipts
40% Gross Income

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