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  • Deductions From Gross Income

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    ralphalonzo
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    This document discusses revenue, capital expenditures, and general allowable deductions for tax purposes. It notes that mixed expenses should be allocated based on gross income. It also distinguishes tax code treatments from GAAP, noting that GAAP includes estimated uncollectibles, miscellaneous expenses, and penalties, while personal exemptions for tax purposes only apply to compensation income for individuals, not corporations. Finally, it lists several general business expenses that are allowable deductions, such as salaries, wages, supplies, repairs, rent, travel, and insurance, provided they were incurred in pursuit of business, trade, or practice.

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    This document discusses revenue, capital expenditures, and general allowable deductions for tax purposes. It notes that mixed expenses should be allocated based on gross income. It also distinguishes tax code treatments from GAAP, noting that GAAP includes estimated uncollectibles, miscellaneous expenses, and penalties, while personal exemptions for tax purposes only apply to compensation income for individuals, not corporations. Finally, it lists several general business expenses that are allowable deductions, such as salaries, wages, supplies, repairs, rent, travel, and insurance, provided they were incurred in pursuit of business, trade, or practice.

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    © All Rights Reserved
    Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    40 vizualizări1 pagină

    Deductions From Gross Income

    Încărcat de

    ralphalonzo
    This document discusses revenue, capital expenditures, and general allowable deductions for tax purposes. It notes that mixed expenses should be allocated based on gross income. It also distinguishes tax code treatments from GAAP, noting that GAAP includes estimated uncollectibles, miscellaneous expenses, and penalties, while personal exemptions for tax purposes only apply to compensation income for individuals, not corporations. Finally, it lists several general business expenses that are allowable deductions, such as salaries, wages, supplies, repairs, rent, travel, and insurance, provided they were incurred in pursuit of business, trade, or practice.

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    din 1

    REVENUE / CAPITAL EXPENDITURES

    - IF MIXED EXPENSE = ALLOCATE BASE ON GROSS INCOME

    TAX CODE VS GAAP

    GAAP INCLUDES ESTIMATED UNCOLLECTIBLES, MISC EXPENSE, PENALTIES


    PERSONAL EXEMPT IS FOR COMPENSATION INCOME (INDIVIDUAL) ONLY NOT FOR CORPORATE

    OSD

    GENERAL ALLOWABLE DEDUCTION

    1. GENERAL BUSINESS EXPENSE


    a. Includes: SALARIES/WAGES. COMMISSIONS, SUPPLIES, REPAIRS, MAINTENANCE,
    TRANSPORTATION, RENT, ADVERTISING, TRAVELLING, INSURANCE, in pursuit of B,T, P
    b. NOLCO is not part of itemized deduction
    c. SALARIES AND WAGES are deductible only if remitted to BIR as WT
    d. COMPENSATION FOR INJURIES, deductible
    e. MATERIALS used
    f. TRAVELLING, in pursuit of B,T, P
    g. RENT, deductible in pursuit of B,T, P and 5% CWT has been made. (ACCRUAL BASIS)
    i. Advance Payment (PREPAID BASIS)
    1. Lessor = Taxable Income
    2. Lessee = not deductible to expense

    h. LEASEHOLD IMPROVEMENT = LIFE OF IMPROVEMENT vs TERM OF LEASE, wchever is SHORTER

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