A resident Filipino engaged in business has a cost ratio to sales of 50%. All expenses are supported with proper documentation. What type of income tax deduction should the individual taxpayer avail of to minimize his/her taxable income? (Explain your answer in not more that three sentences.)
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A resident Filipino engaged in business has a cost ratio to sales of 50%. All expenses are supported with proper documentation. What type of income tax deduction should the individual taxpayer avail of to minimize his/her taxable income? (Explain your answer in not more that three sentences.)
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- From the following list of tax credits, which credits help to reduce the tax liability on a taxpayer's taxable income? 1. Personal tax credit 2. Earned income credit 3. Child savers credit 4. Student loan interest credit 1, 2, and 3. 2 and 3. 2, 3, and 4. 1, 2, 3, and 4.2. Describe the points to consider a tax practitioner must consider while determiningwhether a taxpayer is employed or self-employed. Elaborate the answer according to the question. Answe should not be less than 400 words. Thank you for your afford.What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit?$ Why is there an investment income limit in the tax law regarding the credit? The earned income credit is meant to assist
- When determining earnings subject to SE tax, the taxpayer may want to use one of the optional methods whether if they have a small net profit or loss and which of the following conditions applies A. They are eligible to receive the Additional Child Tax Credit B. They can claim a Credit for Dependent or Child Care Expenses C. Taxpayer wants to receive a Credit for Social Security Benefit Coverage D. All of the above1. Which of the following is required to file an income tax return? A. An employee covered by the substituted filing system. B. A taxpayer deriving purely passive income subject to final tax. C. A special alien with respect to his compensation income. D. A non-resident citizen who derives his entire income form sources outside the Philippines. 2. The taxable income of a mixed income earner is the : A. Net income from business less personal exemption B. Net income from business C. Taxable compensation income D. Taxable compensation income plus net income from business.You are employed. Your salary is your only source of income. You are subject to which of the following taxes? A. Income Tax B. Business Tax C. A and B D. None of these
- Refer to the previous problem 8. If Stan's parents elected to report Stan's income on his parents' return, what would the tax on Stan's income be?1.) Passive incomes of resident citizen derived from abroad is a.subject to final tax b.Tax exempt c. Returnable 2.) Personal expenses of officer which are used in connection with the trade or business of the company ar considered taxable fringe benefits a. True b. FalseTheme: AGI Examine the case below and do the following:1.Indicates the income items that are part of the gross income.2.Indicates the salary exclusions.3.Identify the deductions to which the taxpayer is entitled to calculate the adjusted gross income.4.Calculate adjusted gross income.5.Indicates the status that the taxpayer must file. Case 3 Carmelo Báez is a veteran, retired and receives a pension of $40,000 a year. In addition, he hit the lotto and received a prize of $15,000. He is married to Josefa Martinez, who is also retired and receives a pension of $25,000 a year. They both own a clothing business from which they earn $50,000 a year. They also receive interest from the bank on $3,000 and dividends on a $10,000 investment in a business.
- 1. Deductible transportation expenses: a.Do not include the normal costs of commuting. b.Do not include daily expenses for transportation between the taxpayer's home and temporary work locations if the taxpayer has a regular place of business. c.Include only costs incurred while away from home. d.Include meals and lodging. 2. Barry is a self-employed attorney who travels to New York on a business trip during 2021. Barry's expenses were as follows: Airfare $550 Taxis 40 Restaurant meals 150 Lodging 350 How much may Barry deduct as travel expenses for the trip? a.$0 b.$1,015 c.$940 d.$1,090 e.None of these choices are correct. 3. Which of the following is deductible as dues, subscriptions, or publications? a.Subscription to the "Journal of Taxation" for a tax attorney b.Dues to a health club for a doctor c.Dues to the drama club for a student d.Subscription to "Vogue" magazine for a corporate president e.None of these choices are correct.Describe each of the various tax credits: Child Tax Credit, Earned Income Credit (EIC), Child and Dependent Care Credit, Premium Tax Credit, American Opportunity Credit, Lifetime Learning Credit, Foreign Tax Credit, and the Adoption Credit. For each of the tax credits listed above, are there limitations, such as those on filing status, ages of children, and income levels? Can they be used for the taxpayer, spouse, and/or dependents? Are there specific criteria used to determine if a taxpayer qualifies for the credit?1. Mr. Park is a resident Filipino citizen working as a professional artist in a prestigious TV network.He earned an annual gross income of Php2.5M for the year 2021. He is a Non-VAT registeredtaxpayer. How much is the total income tax still due? Consider withholding taxes. 2. Using the facts above, if Mr. Park is a VAT-registered taxpayer, how much is his total incometax still due? Consider withholding taxes.
