IT’S TAX season once again, and with the deadline tomorrow, expect long lines at accredited banks and tax filing centers.
Doing this year’s ITR, one will notice the increase in exemptions effective July 6, 2008. Computing for exemptions for the year 2008 should thus follow this table:
| Personal Exemption | Jan. 1 to July 5, 2008 | July 6 to Dec. 31, 2008 | Total |
| Single | P10,000 | P25,000 | P35,000 |
| Head of the Family | P12,500 | P25,000 | P37,500 |
| Married | P16,500 | P25,000 | P41,000 |
For each dependent child, a deduction of P4,000 can be claimed for the first half of the year, and P12,500 for the second half of the year. For each child then, total additional exemption is P16,500. This is only for the first four children.
For those earning from the practice of a business or a profession, they may choose the itemized deduction to arrive at their taxable income, or the optional standard deduction. With the itemized deduction, each expense is accounted for. For those choosing the optional standard deduction, the old rate, 10 percent of gross income, is applied to income earned from January 1 to June 30. The new rate, 40 percent, is applied to income earned from July 1 to December 31.
And for those earning a gross income for the year of not more than P250,000, you are entitled to claim a deduction of P2,400 to cover premium payments on health and/or hospitalization insurance.
Have you done and filed your ITR? Do it now to avoid surcharges and penalties. (Karen Galarpe)
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9 Feedbacks on "Know tax exemptions you’re entitled to"
tocino.co71
For those choosing the optional standard deduction, the old rate, 10 percent of gross income, is applied to income earned from January 1 to June 30. The new rate, 40 percent, is applied to income earned from July 1 to December 31.
Is this right? from 10% to 40%??
Robert
I have NEVER paid tax (tax from employment income) for the past 15 yrs mainly because i work overseas (which exempt us from paying taxes). Now, for curiosity’s sake, roughly, magkano kaya ang babayaran kung Gross income mo ay halimbawa P1M ? Married with 2 kids and wife is not working? Just want to know how high/low is our income tax compared to other countries…
nina
@robert,
If I remember it right, if your deductible income is more than P500T, the tax is around 32% more or less. So as OFWs, we should be able to save that 30%
berniejohnpaul
Our income is around 30,000 pesos a month. We have an 18 yr. old son ,still in school , and no income. Our tax adviser is withholding 1,500.00 a month for income tax !
My question is : How much should we really pay for a year ?
edgar Zafra
The old OSD is 10% of Gross Income/Profit, i.e., Gross Sales minus Cost of Sales/Services. The new OSD of 40% is applied to Gross Sales/Revenue.
Thus, the change is not on the OSD percentage only but on the basis of deduction as well.
eugene
Robert,
2008 is an interim year for this new tax regulation. In that year, your income tax is 261,320. In 2009, it will be 253,000.
Nina,
If taxable income is more than 500k, tax on the first 500k is 125k. Tax on the excess is 32%.
berniejohnpaul,
Assuming only the data provided and that the income is yours alone, the tax is 60,500. Withholding tax should be 5,041.67 monthly. Gross income basis is 360k because 13th-month pay of up to 30k is tax-exempt.
1Mearner
1M gross => 275T++ tax
Millionaire Acts
Thanks a lot for this revision in tax. But I think though that this will benefit the middle class the most.
hsan
@berniejohnpaul, if your earning 30k / month that’s 360k / year. minus your exemptions 50k for you and 25k for your son its 75k. So you have GAI of 285k. If you calculate your tax in new basis, its 50k + 30% (285k - 250k). To sum it all, you must pay 60,500 php now per year if im not mistaken.
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