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: Date:
Section: 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 18,000

Monthly allowance 3,000
Annual Commission 120,000
Withholding Tax 60,000

Solution:

I. Gross Compensation Income
II. Less: Personal Exemption
Additional Exemptions
Amount Explanation/Calculation
(monthly salary x 12 months) + (monthly allowance x 12
372,000
months) + annual commission
50,000 Compensation for Married Individuals
75,000 3 dependents x 25,000 per dependent

III. Total Exemptions 125,000 Total of Section II

IV. Taxable Income 247,000 Section I – Section III

Over 140,000 but not over 250,000

V. Tax Due 49,250
22,500 + 25% of excess over 140,000

VI. Less: Tax Withheld 60,000 Given in the problem

Section V – Section VI
VII. Tax Payable/Tax Refundable (10,750)
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 20,000

Monthly overtime pay 1,500
Monthly gas and food allowance 3,500
Withholding Tax 35,000

Solution:

I. Gross Compensation Income
II. Less: Personal Exemption
Additional Exemptions
Amount Explanation/Calculation
(monthly salary x 12 months) + (monthly allowance x 12
300,000
months) + (monthly overtime pay x 12 months)
50,000 Compensation for Head of the Family
50,000 2 dependents x 25,000 per dependent

III. Total Exemptions 100,000 Total of Section II

IV. Taxable Income 200,000 Section I – Section III

Over 140,000 but not over 250,000

V. Tax Due 37,500
22,500 + 25% of excess over 140,000

VI. Less: Tax Withheld 35,000 Given in the problem

Section V – Section VI
VII. Tax Payable/Tax Refundable 2,500
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 Explanation/Calculation
(monthly salary x 12 months) + (monthly allowances x 12
I. Gross Compensation Income 440,000 months) + (medicine allowance x 4 months) + 13th month
pay
II. Less: Personal Exemption 50,000 Compensation for Married Individuals
Additional Exemptions 100,000 4 dependents x 25,000 per dependent

III. Total Exemptions 150,000 Total of Section II

IV. Taxable Income 290,000 Section I – Section III

Over 250,000 but not over 500,000

V. Tax Due 62,000
50,000 + 30% of excess over 250,000

VI. Less: Tax Withheld 39,000 3,250 x 12 months

Section V – Section VI
VII. Tax Payable/Tax Refundable 23,000
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