Explain and expand - Disallowed Cost and Expenses due to Non-Withholding, P3,401,574.00that you have not withheld the appropriate withholding tax due on several income paymentsenumerated hereunder. Section 34(K) of the NIRC of 1997, as amended, expressly provides that,"..any amount paid or payable which is otherwise deductible from, or taken into account incomputing the gross income or for which depreciation or amortization maybe allowed under thisSection, shall be allowed as a deduction only if it is shown that the tax required to be deductedand withheld therefrom has been paid to the Bureau of Internal Revenue in accordance with thisSection of this Code." Hence, the aforementioned amount has been disallowed as an expense.Verification disclosedSchedule 3:Income Payments subjectto Expanded WithholdingTax (EWT)Per BIRDisallowed Cost andExpenses due toNon-WithholdingFormPer ITR/AFS1601-ERateEWTPurchase ofServices/ContractorsOutside ServicesP2,369,477.00PP2,369,477.0O2%47,389.54RentRent-Cost of ServicesP 480,000.00Rent-Operating Expenses389,500.00SubtotalP 869,500.00869,500.005%43,475.00Professional feesP 162,597.00162,597.0010%16,259.70TOTAL3,401,574.00P107,124.24

Withholding tax is the tax which is the type of the tax which is required by the payer of the money…

Answered: - Disallowed Cost and Expenses due to…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter2: Gross Income And Exclusions

Section: Chapter Questions

Problem 1MCQ: The definition of gross income in the tax law is: All items specifically listed as income in the tax...

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Similar questions

Which of the following statements is NOT correct? a.VAT incurred wholly for making taxable supplies is claimable in full. b.Where VAT is incurred for the purpose of both taxable and exempt activities but the input tax relating to taxable supplies cannot be identified, a claim should not be made for any of the input tax. c.VAT incurred wholly for making exempt supplies is not claimable (unless the value of such supplies is not more than X% of total supplies). d.Input tax incurred for Zero-rated supplies is recoverable.
The definition of gross income in the tax law is: All items specifically listed as income in the tax law All cash payments received for goods provided and services performed All income from whatever source derived All income from whatever source derived unless the income is earned illegally
7. It means income (in the broad sense) excluding income which is by statutory provisions or otherwise exempt from the tax imposed by law. Gross Income None of the choices Net assets Net income
1. cont... Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e) Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. (f) For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes. (g)…
Title Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the... Description Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the classification of the asset or liability to which it relates. (b) Under IFRS, some potential liabilities are not recognized. (c) Under GAAP, the enacted tax rate is used to measure deferred tax assets and liabilities. (d) Under IFRS, all deferred tax assets and liabilities are classified as non-current.
This is not a requisite for business expense to be deductible. Group of answer choices It must be reasonable It must be ordinary and necessary It must be paid during the taxable year The withholding tax otherwise required have been deducted and remitted to the BIR
The FASB has carefully avoided the issue of discounting deferred taxes. SFAS No.109,“Accounting for Income Taxes,” stated, a deferred tax liability or asset should be recognizedfor the deferred tax consequences of temporary differences and operating loss or tax creditcarryforwards…. Under the requirements of this Statement: … Deferred tax liabilities andassets are not discounted. a) Present arguments supporting the discounting of deferred taxesb) Present arguments opposing the discounting of deferred taxes.
The tax law refers to gross income, yet the term gross income is not found on Form 1040. Explain.
Which of the following is a temporary difference that normally is recognized for accounting purposes before being reported as an expense for tax purposes? Unearned revenue Product warranty costs Depreciation Fines resulting from violations of the law.
(5) Which of the following statements is NOT correct regarding permanent differences? A. Permanent differences result from items that enter into pretax financial income but never into taxable income. B. Permanent differences result from items that enter into taxable income but never into pretax financial income. C. Permanent differences affect only the period in which they occur. D. Permanent differences result in the recognition of deferred tax.
The recognition of current tax under AASB 112/IAS 12 Income Taxes is based on the following. a. the total income tax expense for the current period. b. the prima facie tax on accounting profit before tax for the current period. c. the tax on taxable profit of the current period that is due to the taxation authorities including amounts paid during the period and amounts payable or receivable at the end of the period. d. the amount of income tax payable to, or receivable from, the taxation authorities at the end of the current period
1 contiune Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e) Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes.(f) For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes.(g)…

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