Danny, a resident alien, is married with 4 children, all minors, by his Filipino wife, full-time housewife.?

Question

He prefers the optional standard deduction. For the taxable year 2006, below are additional data:

Gross business income 1, 500, 000

Gross compensation income 600, 000

Itemized Deductions 500, 000

Premiums paid on health ins. 20, 000

Prizes won in a billiard tournament 100, 000

What is the taxable income?

What is the tax due?

Answer 1

Use the old tax rate since your applicable taxable year is FY2006 where OSD is only 10%, APE is 32K, use the old tax table

Answer 2

Answer:

I assume that all these incomes come from sources within the Philippines.

Gross Business Income 1500000

Gross Compensation Income 600000

Total 2100000

Less: Optional Standard Deduction (40% of GBI) 600000

Less: Health Insurance (maximum) 2400

Less: Basic Exemption 50000

Less: Additional Exemption (3 x 25000) 75000

Taxable Income P 1372600

Tax due (It is up to you to compute it. I don't have the Schedular Rate now. You can find in the books).

The prize won in billiard tournament is subject to a final tax of 20%. Therefore, the tax due on P 100000 is P 20000.

Note: The above computation is based on Republic Act 9504 signed by our President on June 17, 2008.

Optional Standard Deduction is increased from 10 percent to 40 percent.

Basic exemption is standardized to P 50000 from the previous P 32000 for married individuals.

Additional exemption is increased from the previous P 8000 each to P 25000 each.