San Beda College Alabang

Alabang Hills Village Alabang, Muntinlupa City Integrated Basic Education (High School)
That In All Things, God May Be Glorified

Social Studies IV Handout Individual Income Tax Return Sample Problems Name: Section: Date: Teacher:

Problem 1 Mrs. Jolie Sy is employed as a sales manager. Her husband is unemployed for three years now. They have four children; the eldest is 25 years old, the second is 20 years old, the third is 18 years old and the youngest is 15 years old. Compute for the annual income tax return for the taxable year 2011 given the following additional information: Monthly salary Monthly allowance Annual Commission Withholding Tax 18,000 3,000 120,000 60,000

Solution: Amount I. II. III. IV. V. VI. VII. Gross Compensation Income Less: Personal Exemption Additional Exemptions Total Exemptions Taxable Income Tax Due Less: Tax Withheld Tax Payable/Tax Refundable 372,000 50,000 75,000 125,000 247,000 49,250 60,000 (10,750) Explanation/Calculation (monthly salary x 12 months) + (monthly allowance x 12 months) + annual commission Compensation for Married Individuals 3 dependents x 25,000 per dependent Total of Section II Section I Section III Over 140,000 but not over 250,000 22,500 + 25% of excess over 140,000 Given in the problem Section V Section VI TAX REFUND

Tax Due Calculation:

Taxable Income

247,000

Over 140,000 but not over 250,000 22,500 + 25% of excess over 140,000

Tax Due

= 22,500 + (247,000 140,000) x 0.25 = 22,500 + 26,750 = 49,250

Problem 2 Mr. Herrera is unmarried with two legal dependents. The following information is used to determine his income tax. Compute for his annual income tax return for the year 2011: Monthly salary Monthly overtime pay Monthly gas and food allowance Withholding Tax 20,000 1,500 3,500 35,000

Solution: Amount I. II. III. IV. V. VI. VII. Gross Compensation Income Less: Personal Exemption Additional Exemptions Total Exemptions Taxable Income Tax Due Less: Tax Withheld Tax Payable/Tax Refundable 300,000 50,000 50,000 100,000 200,000 37,500 35,000 2,500 Explanation/Calculation (monthly salary x 12 months) + (monthly allowance x 12 months) + (monthly overtime pay x 12 months) Compensation for Head of the Family 2 dependents x 25,000 per dependent Total of Section II Section I Section III Over 140,000 but not over 250,000 22,500 + 25% of excess over 140,000 Given in the problem Section V Section VI TAX PAYABLE

Tax Due Calculation:

Taxable Income

200,000

Over 140,000 but not over 250,000 22,500 + 25% of excess over 140,000

Tax Due

= 22,500 + (200,000 140,000) x 0.25 = 22,500 + 15,000 = 37,500

Problem 3 Mr. Dan Medina is a bank employee. He is married with four children, all in elementary and high school. His salary is P30,000 per month and the following: Medicine allowance every 3 months 5,000 Monthly transportation and food allowance 2,500 Tax withheld per month 3,250 13th month pay equal to his monthly salary, given once a year Solution: Amount I. II. III. IV. V. VI. VII. Gross Compensation Income Less: Personal Exemption Additional Exemptions Total Exemptions Taxable Income Tax Due Less: Tax Withheld Tax Payable/Tax Refundable 440,000 50,000 100,000 150,000 290,000 62,000 39,000 23,000 Explanation/Calculation (monthly salary x 12 months) + (monthly allowances x 12 months) + (medicine allowance x 4 months) + 13th month pay Compensation for Married Individuals 4 dependents x 25,000 per dependent Total of Section II Section I Section III Over 250,000 but not over 500,000 50,000 + 30% of excess over 250,000 3,250 x 12 months Section V Section VI TAX PAYABLE

Tax Due Calculation:

Taxable Income

290,000

Over 250,000 but not over 500,000 50,000 + 30% of excess over 250,000

Tax Due

= 50,000 + (290,000 250,000) x 0.30 = 50,000 + 12,000 = 62,000