Mirabella's husband died in April 2016, leaving seven (7) unmarried children living with and wholly dependent on her for chief support. The ages of the children are as follows:Children Ages StatusAaa 24 joblessBaa 22 mentally retartedCaa 19 studying in ManilaDaa 10 studying in their hometownEaa 8 studying in their hometownFaa 6 studying in their hometownGaa 3 taken by the grandparents for full supportDuring the year, her income was P150,000. She also paid a total premium of P3,000 to an insurance company for his health insurance. How much is his taxable income?Select one:a.P122,000b.P97,600c.P122,600d.P97,000Clear my choice
Question
Mirabella's husband died in April 2016, leaving seven (7) unmarried children living with and wholly dependent on her for chief support. The ages of the children are as follows:Children Ages StatusAaa 24 joblessBaa 22 mentally retartedCaa 19 studying in ManilaDaa 10 studying in their hometownEaa 8 studying in their hometownFaa 6 studying in their hometownGaa 3 taken by the grandparents for full supportDuring the year, her income was P150,000. She also paid a total premium of P3,000 to an insurance company for his health insurance. How much is his taxable income?Select one:a.P122,000b.P97,600c.P122,600d.P97,000Clear my choice
Solution
To calculate Mirabella's taxable income, we need to consider her total income, her exemptions, and her deductions.
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Total Income: Mirabella's total income for the year is P150,000.
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Exemptions: As a single parent, Mirabella is entitled to additional exemptions for her dependent children. However, the Philippines' Tax Code only allows exemptions for up to four (4) dependent children. Therefore, Mirabella can claim exemptions for four of her children. The age or status of the children does not affect the exemption.
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Deductions: Mirabella paid P3,000 for health insurance. This amount can be deducted from her total income.
Assuming that the exemption for each dependent child is P25,000 (based on the previous tax code before the TRAIN law), and the basic personal exemption for single individuals is P50,000, Mirabella's total exemptions would be:
Basic personal exemption: P50,000 Additional exemptions (P25,000 x 4 children): P100,000 Total exemptions: P150,000
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Taxable Income: To calculate the taxable income, subtract the total exemptions and deductions from the total income:
Total income: P150,000 Minus total exemptions: P150,000 Minus health insurance: P3,000 Taxable income: P0
However, this calculation assumes that the exemptions and deductions are greater than or equal to the total income. If the total income is greater, the taxable income would be the difference.
Please note that this is a simplified explanation and actual tax calculations may vary based on other factors not mentioned in the question. Also, the tax code may have changed since this question was written. It's always best to consult with a tax professional for accurate information.
Based on the given choices, none of them are correct. The taxable income, based on the information given, would be P0.
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