part 7.pptx
TRANSCRIPT
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MARY JOY P. JUNIO, CPA
Notre Dame of Midsayap College
Midsayap, Cotabato
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refers to items orreceipts not included inthe determination of
the taxable incomebecause the law ortreaty provides that
they areexempt fromincome tax
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Tax exemption of MWETax exempt contributions
Benefits under the EmployerConvenience RuleProceeds of Life Insurance
Gifts, Bequests, and DevisesCompensation or DamagesRetirement Benefits, etc.
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are business expensesand losses incurred
which the law allowsto reduce gross
business income toarrive at net incomesubject to tax.
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General business expensesInterest
TaxesLossesBad debts
DepreciationCharitable and other cont.Research and development
Pension trust
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Salaries and wagesSupplies
RentalAdvertisingTravellingInsurancepremiums against
fire
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Are the arbitraryamounts allowed by thelaw as a deduction fromthe gross compensationincome and/or netbusiness income and/or
professional income asthe case may be, forpersonal, living or
family expenses.
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1. Basic personal exemption is adeductible allowance which amount
allowed by law shall depend upon thestatus of the individual taxpayerhimself.
2. Additional exemption is adeductible allowance in addition tothe basic personal exemption allowed
for qualified dependent children.
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The dependent must be:
1.A taxpayers child
2.Chiefly dependent for support3.Living with taxpayer
4.Not married, not gainfully
employed and not more than 21
years old.
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Mr. Dela Cruz, married to Mrs. Dela
Cruz, a plain housewife, with 6 qualifieddependent children has a compensation
income of P240,000.00 The total personal exemptions would
be:
Basic personal P50,000.00
Additional 100,000.00