Questions related to income tax, employee compensation, and retirement benefits.

Steps to Solve

Question 47

1. Calculate Carlo's gross income

Carlo's gross income includes basic salary, overtime pay, and holiday pay. RATA is a reimbursable expense and is not taxable income.

Gross income = Basic salary + Overtime pay + Holiday pay $Gross\ Income = 310,438 + 12,450 + 3,000 = 325,888$

2. Calculate taxable 13th month pay and other benefits

The exclusion threshold for 13th month pay and other benefits is P90,000. Any amount exceeding this is taxable.

Taxable 13th month pay and other benefits = 13th month pay and other benefits - P90,000 $Taxable\ benefit = 18,949 - 90,000 = -71,051$

Since the result is negative, the taxable amount is 0 because the 13th month pay is less than P90,000 $Taxable\ benefit = 0$

3. Calculate Carlo's total taxable income

Total taxable income = Gross income + Taxable 13th month pay and other benefits $Total\ Taxable\ Income = 325,888 + 0 = 325,888$

4. Determine the income tax due

The total amount of taxes withheld is given as P17,046. We compare this to the tax table in order to get the correct tax due. Since the income tax withheld is already given, we evaluate if an income tax payable is due.

If the income tax computed based on the tax table is less than the total amount of taxes withheld, income tax payable becomes none.

However, we can check through manual computation of income tax due

Based on the 2023 Tax Table Over P250,000 but not over P400,000 = P20,000 + 20% of excess over P250,000 $Tax\ Due = 20,000 + 0.20 * (325,888-250,000) = 20,000 + 0.20 * 75,888 = 20,000 + 15,177.6 = 35,177.6$

Income tax payable = Income tax due - Total taxes withheld

$Income\ tax\ payable = 35,177.6 - 17,046 = 18,131.6$

Since this difference doesn't match any of the options, the answer must be none.

Question 48

1. Calculate Mr. Anakin's monthly salary before tax Monthly salary before tax = Monthly salary after tax + Monthly withholding tax $Monthly\ salary\ before\ tax = 21,766.60 + 233.40 = 22,000$

2. Calculate Mr. Anakin's annual salary before tax Annual salary before tax = Monthly salary before tax * 12 $Annual\ salary\ before\ tax = 22,000 * 12 = 264,000$

3. Calculate the taxable value of the stock options Taxable value = Number of shares * (Fair market value on date of receipt - Par value)

Note, if par value > fair market value on the date of grant, use fair market value on the date of grant. $Taxable\ value = 200 * (152 - 100) = 200 * 52 = 10,400$

4. Calculate Mr. Anakin's total income Total income = Annual salary before tax + Taxable value of stock options $Total\ income = 264,000 + 10,400 = 274,400$

Since this new amount doesn't match any of the options, it is possible that we only use the Fair Market Value. $Taxable\ value = 200 * (150 - 0) = 30,000$ $Total\ income = 264,000 + 30,000 = 294,000$

Question 49

1. Identify the taxable components

Normally, retirement pay is excluded from gross income, as well as Anniversary bonus and Loyalty award if the employee has rendered service for more than ten years.

2. Calculate the taxable income Taxable income = Basic salary for 2023 + 13th month pay + Anniversary bonus + Loyalty award *consider retirement pay, anniversary bonus, and loyalty awards as excluded in gross income.

$Taxable\ Income = 250,000 + 25,000 + 2,500 + 10,000 = 287,500$

However, we consider that 13th month pay and other benefits are exempt from tax up to P90,000. Since the 13th month pay is P25,000, it is entirely excluded from gross income.

Also, the anniversary bonus and loyalty award are considered other benefits and are added together.

Total other benefits = 25,000 + 2,500 + 10,000 = 37,500. This is less than 90,000, this is excluded

The problem is incomplete, it asks for the retirement benefits received by Rufino, we should provide taxable retirement benefits by Rufino.

Since retirement pay is excluded in gross income, the answer is 0.