ARELLANO UNIVERSITY SCHOOL OF LAW
Investment Law Atty. Atty. Mary Ann L. L. Reyes st 1 Sem, S/Y 2016-2017 Sunday, 1pm-3pm, FCJ207
SUPPLEMENTAL REPORT TAXATION AND CONTINUING REQUIREMENTS FOR SOLE PROPRIETORSHIP
!t"#er 2, 2016
Group 1 Reporters (The Buena manos)
C$r%st%an A#e&&"nar Lan!e Ap"&"n%" '"m%n%!( )"t"r Mar#%en *eran"
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INTRO!UCTION
A !%t%+en " t$e $%&%pp%nes res%d%n t$ere%n %s taa#&e "n a&& %n!"me der%ed r"m s"ur!es %t$%n and %t$"ut t$e $%&%pp%nes. $%&e a n"nres%dent !%t%+en, and a&%en $et$er res%dent "r n"t %n t$e $%&%pp%nes are taa#&e "n&y "n %n!"me der%ed r"m s"ur!es %t$%n t$e $%&%pp%nes. F"r %n!"me re!e%ed r"m s"ur!es %t$%n t$e $%&%pp%nes and $%!$ are n"t su#e!t t" %na& %t$$"&d%n ta 4&%(e pass%e %n!"me5, a res%dent !%t%+en, a n"n-res%dent !%t%+en, a res%dent a&%en, and a n"n-res%dent a&%en %nd%%dua& enaed %n trade "r #us%ness %n t$e $%&%pp%nes are a&& su#e!t t" t$e raduated %n!"me ta rates %n Se!t%"n 2 " t$e at%"na& 8nterna& Reenue C"de " 1997 4t$e :;a C"de<5. ;$e ta s$a&& #e !"mputed %n a!!"rdan!e %t$ and at t$e rates esta#&%s$ed %n t$e "&&"%n s!$edu&e=
INCO"E TA# FOR"ULA
8t %s %mp"rtant t" n"te t$e #as%! "rmu&a t" determ%ne t$e taa#&e %n!"me " an %nd%%dua&. ;$%n( " %t as a r"ad map $ere t$e d%erent pr"%s%"ns " t$e !"de %&& p&u %nt". ;$e "rmu&a t" determ%ne t$e taa#&e %n!"me " an %nd%%dua& %s as "&&"s= >r"ss 8n!"me Less= 'edu!t%"ns 4%.e., e%t$er %tem%+ed dedu!t%"ns "r 0? "pt%"na& standard dedu!t%"n5 8n!"me )e"re ers"na&/Add%t%"na& @empt%"ns and rem%um ayments "n 8nsuran!e Less= ers"na&/Add%t%"na& @empt%"ns and rem%um ayments "n 8nsuran!e ;aa#&e 8n!"me ;a Rate= S!$edu&ar ;a Rates ;a 'ue 2
O$TIONAL STAN!AR! !E!UCTIONS
8n &%eu " t$e dedu!t%"ns a&&"ed under t$e pre!ed%n Su#se!t%"ns, an %nd%%dua& su#e!t t" ta under Se!t%"n 2, "t$er t$an a n"nres%dent a&%en, may e&e!t a standard dedu!t%"n %n an am"unt n"t e!eed%n "rty per!ent 40?5 " $%s r"ss sa&es and/"r re!e%pts. n&ess t$e tapayer s%n%%es %n $%s return $%s %ntent%"n t" e&e!t t$e "pt%"na& standard dedu!t%"n, $e s$a&& #e !"ns%dered as $a%n aa%&ed $%mse& " t$e %tem%+ed dedu!t%"ns. Su!$ e&e!t%"n $en made %n t$e return s$a&& #e %rre"!a#&e "r t$e taa#&e year "r $%!$ t$e return %s made= r"%ded, ;$at an %nd%%dua& $" %s ent%t&ed t" and !&a%med "r t$e "pt%"na& standard dedu!t%"n s$a&& n"t #e reBu%red t" su#m%t %t$ $%s ta return su!$ %nan!%a& statements "t$er%se reBu%red under t$%s C"de= r"%ded, urt$er, ;$at e!ept $en t$e C"mm%ss%"ner "t$er%se perm%ts, t$e sa%d %nd%%dua& s$a&& (eep su!$ re!"rds perta%n%n t" $%s r"ss %n!"me dur%n t$e taa#&e year, as may #e reBu%red #y t$e ru&es and reu&at%"ns pr"mu&ated #y t$e Se!retary " F%nan!e, up"n re!"mmendat%"n " t$e C"mm%ss%"ner. $ERSONAL AN! A!!ITIONAL !E!UCTIONS
A pers"na& and add%t%"na& eempt%"ns are ranted #y &a t" !erta%n %nd%%dua&s t" &essen t$e%r ta &%a#%&%ty. &ease reer t" t$e %&&ustrat%"n #e&"= Ta%pa&er Res%dent C%t%+en "n-res%dent !%t%+en Res%dent a&%en "n-res%dent a&%en enaed %n trade "r #us%ness
$ersona' E%empt(on Yes Yes Yes Yes
A))(t(ona' E%empt(on Yes Yes Yes "
A pers"na& eempt%"n am"unt%n t" %ty t$"usand pes"s 40,000.005 "r ea!$ %nd%%dua& tapayer %s ranted #y &a. F"r add%t%"na& eempt%"n, an am"unt " tenty%e t$"usand pes"s 42,000.005 "r ea!$ dependent n"t e!eed%n "ur 45 %s ranted #y &a. ;$e add%t%"na& eempt%"n "r dependent s$a&& #e !&a%med #y "n&y "ne " t$e sp"uses %n t$e !ase " marr%ed %nd%%dua&s. 8n t$e !ase " &ea&&y separated sp"uses, add%t%"na& eempt%"ns may #e !&a%med "n&y #y t$e sp"use $" $as !ust"dy " t$e !$%&d "r !$%&dren= r"%ded, t$at t$e t"ta& am"unt " add%t%"na& eempt%"ns t$at may #e !&a%med #y #"t$ s$a&& n"t e!eed t$e ma%mum add%t%"na& eempt%"ns $ere%n a&&"ed. F"r purp"ses " t$%s, a DdependentD means a &e%t%mate, %&&e%t%mate "r &ea&&y ad"pted !$%&d !$%e&y dependent up"n and &%%n %t$ t$e tapayer % su!$ dependent %s n"t m"re t$an tenty-"ne 4215 years " ae, unmarr%ed and n"t a%nu&&y emp&"yed "r % su!$ dependent, reard&ess " ae, %s %n!apa#&e " se&-supp"rt #e!ause " menta& "r p$ys%!a& dee!t.
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;$e &a a&s" a&&"s #enea!t"r " sen%"r !%t%+en t" #e ent%t&ed t" !&a%m t$e #as%! pers"na& eempt%"n " %ty t$"usand pes"s 40,000.005. A #enea!t"r reers t" any pers"n $et$er re&ated "r n"t t" t$e sen%"r !%t%+en $" pr"%des !are "r $" %es any "rm " ass%stan!e t" t$e sen%"r !%t%+en. Furt$er, t$%s %s a pers"n "n $"m t$e sen%"r !%t%+en %s dependent "n "r a pr%mary !are and mater%a& supp"rt, as !ert%%ed #y t$e !%ty " Mun%!%pa& S"!%a& e&are and 'ee&"pment %!er. $rem(um $a&ments on Hea't* an)+or Hosp(ta'(,at(on Insuran-e o. an In)(v()ua' Ta%pa&er
;$e am"unt " prem%ums n"t t" e!eed ;" t$"usand "ur $undred pes"s 42,005 per am%&y "r ;" $undred pes"s 42005 a m"nt$ pa%d dur%n t$e taa#&e year "r $ea&t$ and/"r $"sp%ta&%+at%"n %nsuran!e ta(en #y t$e tapayer "r $%mse&, %n!&ud%n $%s am%&y, s$a&& #e a&&"ed as a dedu!t%"n r"m $%s r"ss %n!"me= r"%ded, ;$at sa%d am%&y $as a r"ss %n!"me " n"t m"re t$an ;" $undred %ty t$"usand pes"s 420,0005 "r t$e taa#&e year= r"%ded, %na&&y, ;$at %n t$e !ase " marr%ed tapayers, "n&y t$e sp"use !&a%m%n t$e add%t%"na& eempt%"n "r dependents s$a&& #e ent%t&ed t" t$%s dedu!t%"n. "a(nta(n A--ount(n/ 0oos
Ater re%strat%"n " s"&e pr"pr%et"rs$%p, t$e net step %s t" (eep an a!!"unt%n re!"rd. ;$ese are t$e #as%! a!!"unt%n #""(s enera&&y ma%nta%ned #y s"&e pr"pr%et"rs$%p=
>enera& J"urna& >enera& Leder Cas$ Re!e%pt J"urna& Cas$ '%s#ursement J"urna&
Important Note Ma(e sure t$at t$e a!!"unt%n #""(s are re%stered %t$ t$e )8R. Issue) 0IR Re/(stere) Invo(-es an)+or Re-e(pts
Ater re%ster%n, and #e"re y"u start "perat%n "r "er%n y"ur ser%!es, re%ster y"ur %n"%!es and re!e%pts %t$ t$e )8R.
F"r manua& %n"%!es and/"r re!e%pts, &""( "r an a!!red%ted pr%nter $" %&& d" t$e pr%nt%n " y"ur %n"%!es and/"r re!e%pts. F"r !"mputer%+ed %n"%!es and/"r re!e%pts, "%nt-"-Sa&e4S5, Cas$ Re%ster Ma!$%ne 4CRM5, et!., re%ster y"ur !"mputer%+ed system %t$ t$e )8R.
2eep t*e re-e(pts o. &our e%penses
8tEs typ%!a& "r #us%ness, een ree&an!ers, t" %n!ur epenses %n "rder t" "perate. @pense %s dedu!ted r"m r"ss sa&es %n "rder t" !"me up %t$ t$e net %n!"me. As su!$, ensure t$at y"u (eep y"ur epense re!e%pts s" y"u !an determ%ne t$e true %nan!%a& per"rman!e 4"r pr"%t5. 4
F('e an)+or pa& t*e ta% returns on t(me
n!e y"uEre re%stered %t$ t$e )8R, (eep %n m%nd t$at y"u are reBu%red t" pay "r %&e m"nt$&y and Buarter&y ta returns depend%n "n t$e ta types re&e!ted "n t$e )8R Cert%%!ate " Re%strat%"n, as "&&"= "ont*'&
)8R F"rm 1601@ % y"u are rent%n, pay%n pr"ess%"na&s "r !"mm%ss%"ns. ;$%s %s due "r payment "r %&%n "n "r #e"re 10t$ day " t$e m"nt$ "&&"%n t$e m"nt$ $ere t$e transa!t%"n "!!urred. )8R F"rm 1601C % y"u $ae emp&"yees under emp&"yment. ;$%s %s due "r payment "r %&%n "n "r #e"re 10 t$ day " t$e m"nt$ "&&"%n t$e m"nt$ $ere t$e transa!t%"n "!!urred. )8R F"rm 1601F % y"u $ae &"ans. ;$%s %s due "r payment "r %&%n "n "r #e"re 10t$ day " t$e m"nt$ "&&"%n t$e m"nt$ $ere t$e transa!t%"n "!!urred. )8R F"rm 21M F"r "n-*A; %nd%%dua&. 8t %s t$e !"mputed sa&es ta eBu%a&ent t" 3? " m"nt$&y r"ss sa&es. ;$%s %s due "r payment "r %&%n "n "r #e"re 20 t$ day " t$e m"nt$ "&&"%n t$e m"nt$ $ere t$e transa!t%"n "!!urred. )8R F"rm 20M F"r *A; %nd%%dua&. 8t %s !"mputed sa&es ta eBu%a&ent t" 12? " m"nt$&y ata#&e sa&es &ess 12? " ata#&e pur!$ases/epenses. ;$%s %s due "r payment "r %&%n "n "r #e"re 20 t$ day " t$e m"nt$ "&&"%n t$e m"nt$ $ere t$e transa!t%"n "!!urred.
3uarter'&
)8R F"rm 20G F"r *A; %nd%%dua&. 8t %s s%m%&ar t" )8R F"rm 20M, #ut %nstead " "ne m"nt$, %t rep"rts t$e t$ree m"nt$s %n a part%!u&ar Buarter. 8tEs due "r payment "r %&%n "n "r #e"re 2t$ day " t$e m"nt$ "&&"%n t$e !&"se " t$e taa#&e Buarter. )8R F"rm 1701G ;$%s %s t$e %n!"me ta "r t$e Buarter. 8tEs due "r payment "r %&%n "n "r #e"re t$e t$ day " t$e m"nt$ "&&"%n t$e !&"se " t$e taa#&e Buarter. %t$ t$e e!ept%"n " !"urse " t$e %rst taa#&e Buarter $%!$ %s due "r %&%n and payment "n "r #e"re Apr%& 1 "&&"%n t$e !&"se " t$e taa#&e Buarter. 8n s$"rt t$e dead&%ne "r %&%n %s t$e dead&%ne date as t$at " Annua& 8n!"me ;a Return " t$e pre!ed%n taa#&e year. "te $"eer t$at %&%n s$"u&d n"t #e ear&%er t$an Apr%& 1. ;$e reas"n %s t$at, t$e !"er%n per%"d "r %rst Buarter %s r"m January 1st t" Mar!$ 31 st.
F('e an)+or pa& annua' reports
r"%ded, t$at, "n "r #e"re Apr%& 1t$ " ea!$ year, y"u need t" %&e "r pay )8R F"rm 1701 Annua& 8n!"me ta return #ased "n y"ur net %n!"me "r t$e pre!ed%n year.
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"te t$at %nd%%dua& tapayers are n"t a&&"ed t" use %s!a& year as t$e%r a!!"unt%n per%"d. F%s!a& year %s a taa#&e year end%n "n any m"nt$ n"t 'e!em#er. Renew &our '(-enses annua''&
n!e re%stered, y"u need t" rene y"ur &%!enses and perm%ts t" L>s "n "r #e"re January 20t$ " ea!$ year.
$ttp=//mpm.p$/#""((eep%n-and-ta-ree&an!er/ at%"na& 8nterna& Reenue C"de " 1997
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