Income Tax

Taxable income of husband and wife should be computed separately. Combine income and related expenses should be divided equally.

Additional requirement: Compute for the income tax due based on the attached Income Tax Table:

HERE IS THE TAXABLE INCOME OF THE HUSBAND AND WIFE.

Mrs. And Mr. Salazar, a resident, have one dependent under the age of 21 and another with psychological incapacity. They engaged your services to prepare their income tax returns. The husband waived the additional exemptions in favor of his wife.

Salary of the husband, after deduction of withholding tax -----450,000

Salary of the wife, before deduction of withholding tax-----600,000

Gross professional income, husband--------1,500,000

Cost of services, husband------500,000

Expenses, practice of profession of husband----300,000

Gross Sales, wifes business-----800,000

Cost of sales, wifes business-------300,000

Business expenses, wife------100,000

Gross rent income-------700,000

Expenses from rent income----- 200,000

Business income, Singapore------- 600,000

Business expenses, Singapore------- 150,000

a. How much is the taxable net income of the husband and wife itemized deduction?

b. How much is the taxable net income of the husband and wife using OSD?

TAX TABLE

Annual Income	Tax Rate
250,000 and below	None (0%)
250,000 to 400,000	20% of excess over 250,000
400,000 to 800,000	30,000 + 25% of excess over 400,000
800,000 to 2,000,000	130,000 + 30% of excess over 800,000
2,000,000 to 8,000,000	490,000 + 32% of excess over 2,000,000
Above 8,000,000	2,410,000 + 35% of excess over 8,000,000