Income Taxation

Topics: Tax, Tax refund, Taxation in the United States Pages: 3 (471 words) Published: September 14, 2014
Sta. Maria, Oel Angel
BSBA – Marketing III
February 15, 2014
Law in Income Taxation
Mrs. Gosom

Business Income Tax –

A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

Resident Citizen –

A citizen of his country who has a permanent home or place of abode in his country to which he/she intends to return whenever he/she is absent for business or any vacation.

Resident Alien –

A person who is not a citizen of the Philippines but whose residence is within the Philippines.

Non-resident Alien –

A non-resident alien engaged in trade or business is one who stays in the Philippines for more than 180 days during the calendar year. The taxable income of non-resident alien engaged in trade or business is their gross income. Another definition is, An individual who is not a citizen of the Philippines and whose residence is not within the Philippines.

Table of Income tax return of Individual Annually

< ₱ 10,000
5%
₱ 500
₱ 10,000 - ₱ 30,000
10%
₱ 500
₱ 30,000 - ₱ 70,000
15%
₱ 2,500
₱ 70,000 - ₱ 140,000
20%
₱ 8,500
₱ 140,000 - ₱ 250,000
25%
₱ 22,500
₱ 250,000 - ₱ 500,000
30%
₱ 50,000
Over ₱ 500,000
32%
₱ 125,000

How to compute the taxable income:

The first step is you should answer the following questions below:

I. What is Your Status? Single or Married?
II. Do You Have Any Dependent? How Many?
III. How much is your Monthly salary? And additional salary (Night differential, Holiday pay, Overtime & ETC) IV. Other taxes (Phil Health, SSS & ETC)
V. Salary deduction (Allowances, Tardiness & ETC)

General Formula:

Withholding Tax = ( ( [Taxable Income] -...
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