Regular Income Tax Flashcards
(14 cards)
What is Taxable Income?
Pertinent items of Gross Income not subject to FWT or CGT less allowable deductions
- INCOME SUBJECT TO RIT
GROSS INCOME
- ALLOWABLE DEDUCTIONS
= TAXABLE INCOME
What if the problem asks for those subject to PH tax?
Then lahat na yan:
1. Fwt
2. Cgt
3. Regular tax
Deadline of quarterly ITR for individual and corporations
Individual: 45 days after end of quarter
Corporate: 60 days after EOQ
Deadline annual ITR for individual and corporate
Individual: april 15 next year
Corporate: 15th day of 4th month end of year
Progressive Tax rate 2023 onwards
0- 250,000 = 0%(MW threshold)
250,000 - 400,000= 15% in excess
400,000 - 800,000 = 20% in excess + 22,500
800,000- 2,000,000 = 25% in excess + 102,500
2,000,000 - 8,000,000 = 30% in excess + 402,500
8,000,000 ~ = 35% in excess + 2,202,500
TBH important lang dito yung 1st rate and yung first amount sa threshold.
- kasi +5% lang naman
- tas yung +22,500 and etc is just the excess ng previous rate. ( 250,000-400,000= 150,000 x 15% = 22,500)
Exclusions from Gross Income ( PS3)
- i wont include inclusions, since generally pag wala naman siya sa exclusion sa inclusion siya. (And masyado kasi broad ang inclusions)
- Proceeds of Life Insurance
- Prizes (CLEAR) - CHARITY, LITERARY, EDUCATION, ARTISTIC, RELIGIOUS
- Prizes and Awardss
Explanation
1. Not taxable ang loss of life.
- When taxable: outlive the insurance, excess of paid is taxable.
(Ex. 1m life insurance, 50,000 a year for 5 m years. The insured outlived the insurance.)
- 50,000 x 5 = 250,000
- the 250,000 part of 1m is return of capital
- the 750,000 is in excess, hence, taxable.
- Prizes and awards
- sanctioned by national sports organization
-granted to athletes (local or international competitions)
Exclusions from Gross Income ( RIC2)
- i wont include inclusions, since generally pag wala naman siya sa exclusion sa inclusion siya. (And masyado kasi broad ang inclusions)
- Retirement benefits, pensions, etc.
- Return of Premium
3.Income of government - Income of political subdivision
- Compensation for injury
- Contributions ( SSS, PHILHEALTH, HDMF, UNION DUES)
Requisite for exemption of retirement benefits for employers with retirement plan
- First time avail.
- Service for same employer for at least 10 years ( cumulative)
- At least 50 years of age *
- Employer maintains a resonable private benefit plan.
- ( ang senior citizen age natin ay 65 based on PHlaw, kaya dont be confused if there are mcqs na kasama sa choices ay “he is a senior citizen” hindi siya requisite. )
Requisite for exemption of retirement benefits for employers without retirement plan
- At least 60 years old
- Served the company for atleast 5 years
Exclusions from Gross Income ( G4)
- i wont include inclusions, since generally pag wala naman siya sa exclusion sa inclusion siya. (And masyado kasi broad ang inclusions)
- Gifts
- GSIS benefits
- Gains from sale of bonds etc. ( more than 5 years maturity)
- Gains from mutual funds
Exclusions from Gross Income ( 13th - MUFT)
- i wont include inclusions, since generally pag wala naman siya sa exclusion sa inclusion siya. (And masyado kasi broad ang inclusions)
- 13th month pay and other benefits - within 90,000 threshold
- Minimum Wage
- US veterans administration
- Foreign Government
- Treaties
Requisite for exemption of separation or termination ( under PS3)
Termination due to employee- taxable
Termination beyond employee control- exempt
1. Death
2. Sickness
3. Retention
4. Layoff
5. Redundancy
6. Closure business
7. Force resignation
- List above is not limited to that. Basta beyond control niya exempt
Other sources of gross income
- Farming
- Tax benefits
Bad debt recovery - taxable
Tax refund- taxable - Cancellation of indebtedness
For services - income
With no consideration - gift - Damage recovery
Taxes that will not form part of gross income when recovered
- Estate and donor
- Stock transaction
- Income tax foreign
- PH income tax
- Special assessment
