ITEMIZED DEDUCTIONS

1. Interest Expense
2. Taxes
3. Losses
4. Bad Debts
REVIEW OF PREVIOUS 5. Depreciation
6. Depletion
DISCUSSION: 7. Charitable and other contributions
8. Contribution to pension and trust
Regular Allowable 9. Research and development cost
10. Other ordinary and necessary trade,
Itemized business, or professional expenses

Deductions
 ALLOWABLE DEDUCTIONS
 Itemized Deductions
 Regular Allowable Itemized Deductions
 Special Allowable Itemized
Deductions
THE REGULAR INCOME TAX
MODEL  Optional Standard Deductions
Special Allowable
Itemized Deductions
SPECIAL ALLOWABLE DEDUCTIONS B. Deduction incentives under the NIRC
and special laws.
A. Special Expenses under the NIRC and
special laws
A. Special Expenses under the NIRC and
special laws
A. Special Expenses under the NIRC and
special laws
A. Special Expenses under the NIRC and
special laws
B. Deduction incentives under the NIRC
and special laws.

 Additional deduction of 15% of the total amount  Additional deduction of 25% of the total amount
paid as salaries and wages to senior citizens. paid as salaries and wages to disabled persons.

 Additional deduction of 50% of the direct cost of

the improvements or modifications.
B. Deduction incentives under the NIRC and
special laws.

 Additional deduction of 50% of the expenses

incurred in training schemes.

 Additional deduction of 50% of the value of labor

training expenses incurred for skills development.
B. Deduction incentives under the NIRC and
special laws.

 Contributions to the government in priority

activities are deductible in full while for non-priority
activities are deductible subject to limit.
 Additional deduction of 50% of the contribution of
the adopting entity
B. Deduction incentives under the NIRC and  Amount of actual performance of the actual free
special laws. services rendered or up to 10% of gross income
derived from actual performance of the legal
profession w/c ever is lower.

 Deductible expenses UP TO TWICE the actual

amount incurred.
B. Deduction incentives under the NIRC and
special laws.

 Additional deduction of 50% of the total productivity

bonuses given to employees under the program.
 Additional deduction of 50% of the total grant for
local trainings and special studies (rank-and-file
employee).
NET OPERATING LOSS
CARRY-OVER (NOLCO)
  Who can claim NOLCO?
 All taxpayers subject to tax on taxable
income whether at the regular income
tax or at preferential tax rate can
deduct NOLCO.

Net Operating Loss Carry Over

(NOLCO)
• Net Operating Loss means the excess of
allowable deduction over the gross
income in a taxable year. The net
operating loss of a business for any
taxable year shall be carried over as a
deduction from gross income for three (3)
consecutive taxable years.
• However, the NOLCO of a business for
taxable years 2020 to 2021 shall be
carried over as a deduction from gross
income for five (5) consecutive years
following the year of loss.
Net Operating Loss Carry Over (NOLCO)
Net Operating Loss Carry Over (NOLCO)
OPTIONAL STANDARD
DEDUCTION (OSD)
OPTIONAL STANDARD DEDUCTION (OSD)
THANK YOU!