1. Individual earning mixed income

Assume that Mr. LED, a resident citizen employee who is also engaged in business, has the following compensation; and income and expenses related to his business operation for year 2024:

Compensation income -
	Annual basic salary	1,080,000.00
	Allowances	180,000.00
	13th month pay	90,000.00
	Christmas bonus	90,000.00
	Cash gift	5,000.00
	Productivity incentive	5,000.00
Gross compensation income	1,450,000.00
SSS and other contributions:
	SSS premium contribution	9,600.00
	PHIC contribution	30,000.00
	Pag-ibig contribution	1,200.00
Total SSS and other contributions	40,800.00
Business income and expenses -
	Sales	2,900,000.00
	Cost of sales	1,300,000.00
	Expenses:
	Salaries and allowances	600,000.00
	Office supplies expenses	25,000.00
	Transportation and travel expenses	30,000.00
	Representation expenses	29,000.00
	Repairs and maintenance	15,000.00
	Fuel, oil and lubricants	26,500.00
	Taxes and licenses	3,500.00
	Miscellaneous expenses	21,000.00

Required:

1. Compute income tax payable if Mr. LED avails of the itemized deduction.

Answer rating: 100% (QA)

To compute Mr LEDs income tax payable we can follow these steps 1 Calculate the gross compensation i... View the full answer