allowable deductions

Overview of Deductible Expenses in the Philippines

By: Garry S. Pagaspas In computing for the income tax in the Philippines, certain deductible expenses are subtracted from gross income. They are technically termed as “allowable deductions from gross income” and they could be under itemized deductions or under optional standard deductions (OSD). In either case, they share the same concept, unless stated hereunder.

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How to compute Optional Standard Deductions (OSD)?

Under the advent of Republic Act No. 8424 otherwise known as “The Tax Reform Act of 1997” (RA 8424), OSD is applicable only to individual taxpayers engaged in trade or business, or engaged in the practice of profession. It is computed at ten percent (10%) based on the gross profit after deducting the cost of

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Tax savings under Optional Standard Deduction (OSD)

For taxpayers engaged in trade, business, or practice of profession, optional standard deduction (OSD) is a good are to look at for tax savings.  Under Section 34(L) of the Tax Code, as amended by Republic Act No. 9504 dated June 17, 2008, and hereunder quoted: “Section 34(L) Optional Standard Deduction. – In lieu of the

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