Marquez Julian M.

Income Taxation

1. An actress received talent fees from ABS-CBN amounting to P20,000,000 for 2018.
The creditable taxes withheld from the talent fees amounted to P1,600,000. She
incurred costs and expenses amounting to P5,000,000. Her income tax is:

Gross Income (20,000,000) + Creditable Taxes (1,600,000) – Costs & Expenses

(5,000,000) = 16,600,000

Gross Income (16,600,000) – 8,000,000 = Excess Taxable Income (8,600,000)

8,000,000 = 2,410,000 Tax Rate

Excess Taxable Income 8,600,000 x 35% = 3,010,000

Income Tax = 5,420,000

2. The taxpayer, a minimum wage earner, works for a foundation. He is not engaged in
business nor has any other source of income other than his employment. In 2018, the
taxpayer earned a total compensation income of P135,000. He contributed to the SSS,
Philhealth, and HDMF amounting to P5,000 and has received 13th-month pay of
P11,000. In 2019, the taxpayer earned, aside from his basic wage, additional pay of
P140,000 which consists of the overtime pay of P80,000, night shift differential of
P30,000, hazard pay of P15,000 and holiday pay of P15,000. He contributed to the
SSS, Philhealth, and HDMF amounting to P5,000 and has received 13th-month pay of
P11,000. What is his income tax liability in 2019?

Basic Wage (135,000) + Additional Pay (140,000) = 275,000

20% of Excess 25,000 = 5,000

Income Tax 2019 = 5,000

3. A taxpayer operates a convenience store while she offers bookkeeping services to

her clients. In 2018, her gross sales amounted to P800,000, in addition to her receipts
from bookkeeping services of P300,000. She already signified her intention to be taxed
at 8% income tax rate in her 1st quarter return. How much is his tax due in 2018?

Gross Sales (800,000) + Receipts from Services (300,000) = 1,100,000 x 8%

Tax Due = 88,000

4. A taxpayer operates a convenience store while she offers bookkeeping services to

her clients. In 2018, her gross sales amounted to P800,000, in addition to her receipts
from bookkeeping services of P300,000. She failed to signify her intention to be taxed at
8% income tax rate on gross sales in her initial Quarterly Income Tax Return, and she

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 incurred the cost of sales and operating expenses amounting to P600,000 and
P200,000, respectively, or a total of P800,000. How much is his tax due in 2018?

Gross Sales (800,000) + Receipts from Services (300,000) – Operating Expenses

(800,000) = 300,000

300,000 – 250,000 = 50,000 x 20% = 10,000

Tax Due = 10,000

5. Palafox is a prominent independent contractor who offers architectural and

engineering services. Since his career flourished, her total gross receipts amounted to
P4,250,000 for the taxable year 2018. His recorded cost of service and operating
expenses were P2,150,000 and P1,000,000, respectively. How much is the income tax
due in 2018?

Gross Receipts (4,250,000) – Operating Expenses (3,150,000) = 1,100,000

Tax Rate = 130,000 + 30% of Excess 300,000 = 220,000

Tax Due = 220,000

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