Valid Deductible Expenses in PH
If you have taxable income, filing and paying your income tax is a must before the due date. In computing your income tax, you have to determine the valid expenses to be deducted in your gross income. As heroic professionals, we must be honest and wise in claiming only what is considered as valid deductions. Some computed higher, some computed lower than it should be. If you want to minimize your income tax legibly, you should know the following allowable expenses.
The following are the BIR listed expenses in PH that is deductable as itemized deduction.
- Advertising and Promotions
- Amortizations
- Bad debts
- Charitable contributions (subject to limitation)
- Commissions
- Communications, lights and water
- Depletion
- Depreciation
- Director’s fees
- Fringe benefits
- Fuel and Oil
- Insurance
- Interest (subject to limitation)
- Janitorial and messengerial services
- Losses
- Management and consultancy fee
- Miscelleneous
- Office Supplies
- Other services
- Professional fees
- Rental
- Repairs and maintenance- labor or labor and materials
- Repairs and maintenance- materials/supplies
- Representation and entertainment subject to limitation:
- ½ of 1% of net sales for seller of goods
- 1% of net revenue for seller of services
- Research and Development
- Royalties
- Salaries and allowances
- Security Services
- SSS, GSIS, PhilHealth, HDMF and other contributions
- Taxes and licenses
- Tolling fees
- Training and seminars
- Transportation and travel
- Pension Trust
Valid evidence to claim expenses
- Official Receipts (OR)
- Cash/Sales Invoice
- Payroll
- Vouchers
- Bank Statements
- Debit/Credit Memo
For more info. about taxes and payroll, visit dashpayroll.com and be updated for latest news.
