Question
Individual earning mixed income Assume that Mr. LED, a resident citizen employee who is also engaged in business, has the following compensation; and income and
- Individual earning mixed income
Assume that Mr. LED, a resident citizen employee who is also engaged in business, has the following compensation; and income and expenses related to his business operation for year 2024:
| Compensation income - | ||
| Annual basic salary | 1,080,000.00 | |
| Allowances | 180,000.00 | |
| 13th month pay | 90,000.00 | |
| Christmas bonus | 90,000.00 | |
| Cash gift | 5,000.00 | |
| Productivity incentive | 5,000.00 | |
| Gross compensation income | 1,450,000.00 | |
| SSS and other contributions: | ||
| SSS premium contribution | 9,600.00 | |
| PHIC contribution | 30,000.00 | |
| Pag-ibig contribution | 1,200.00 | |
| Total SSS and other contributions | 40,800.00 | |
| Business income and expenses - | ||
| Sales | 2,900,000.00 | |
| Cost of sales | 1,300,000.00 | |
| Expenses: | ||
| Salaries and allowances | 600,000.00 | |
| Office supplies expenses | 25,000.00 | |
| Transportation and travel expenses | 30,000.00 | |
| Representation expenses | 29,000.00 | |
| Repairs and maintenance | 15,000.00 | |
| Fuel, oil and lubricants | 26,500.00 | |
| Taxes and licenses | 3,500.00 | |
| Miscellaneous expenses | 21,000.00 |
Required:
- Compute income tax payable if Mr. LED avails of the itemized deduction.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To compute Mr LEDs income tax payable we can follow these steps 1 Calculate the gross compensation i...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
