Atty.

Miguel Legazpi, with TIN 331-875-803-0000, is employed as a rank-and-file corporate lawyer

of EFG International. In 2023, he received the following from his employment:

Salary (gross of deductions) P 1,800,000

Profit sharing 300,000
13th month pay (excluded from salary) 150,000
De Minimis Benefits:
Clothing allowance 15,000
Laundry allowance 12,000
Christmas gift 25,000
Monetized unused VL credits (15 days) 90,000
Monetized unused SL credits (10 days) 60,000
Mandatory Deductions:
SSS Employee Contributions 22,000
HDMF Employee Contributions 1,200
PHIC Employee Contributions 7,200
Tax withheld by EFG International 402,500

The following were also reported by his pet shop business in 2023 registered as sole
proprietorship:

Sales Revenues P 950,000

Cost of Goods Sold 400,000
Salaries Expense 195,000
Rent Expense 50,000
Utilities Expense 25,000

Atty. Legazpi also earned the following income in 2023:

PCSO Lotto Winnings P 10,000
Interest Income from bank deposit – BPI Marilao 9,600
(amount received)

1. How much is the taxable compensation income of Atty. Legazpi?

2. How much is the exempt compensation income of Atty/ Legazpi?
3. How much is the income subject to final tax?
4. How much is the income subject to normal tax?
5. How much is the total income tax due assuming Atty. Legazpi opted to be taxed under
the graduated income tax regime (Sec. 24A)?
6. How much is the total income tax due assuming Atty. Legazpi opted to be taxed at 8%
income tax?
Marites Corporation is engaged in the business of manufacturing candies. Marites Corporation
was incorporated in the year 2020 at Bocaue, Bulacan. It commenced its operations in the same
year. The Corporation is employing a calendar-year basis.
During the year 2024, Marites Corporation reported the following:

Sales P 9,000,000
Sales Returns 100,000
Cost of Sales 2,700,000
Depreciation of equipment 250,000
Rent expense 150,000
Utilities expense 100,000
Salaries expense 320,000
Business permit and other licenses 20,000
Mandatory contributions for employees paid by Marites Corp. 55,000
Tax withheld by customers 790,000

1. Determine the taxable income and tax due assuming that Marites is employing itemized
deduction.
2. Determine the tax benefit or tax cost of employing itemized deduction over OSD in the
case of Marites Corporation.