Gross income

Definition of Gross Income, Taxable Income, and Net Income Gross income refers to all income but not excluding exempt income and subject to final income tax. Example of gross income include: salaries and wages, commission, sale of and other dealings in property, rents, dividends, and securities. Exclusion from gross income or those incomes that are exempted from tax include: life insurance proceeds paid to beneficiaries upon the death of the insured; compensation for injuries or sickness, retirement benefits, pensions, and gratuities; prizes and awards granted in recognition of achievements; and income exempts under treaty. Meanwhile, deductions or those amounts which the law allows to be deducted from the gross income to arrive at taxable income are the following optional standard deduction (a deduction an individual other than nonresident alien may claim in lieu of itemized deduction), business expenses, interests, taxes, losses (not paid by insurance), bad debts, depreciation of properties, depletion of natural resources, charitable and other contributions, GSIS/SSS contributions, Medicare/PhilHealth, Pag-IBIG Fund, premium payment on health /hospitalization and insurance amounting to P2,400.00 if the gross income is not more than P250,000.00 per annum. Further, taxable income refers to a pertinent item of gross income specified in the tax code less deduction of personal and/or additional exemptions. Finally, net income refers to the gross income less allowable deductions.
Status of Taxpayers
1. Single. It refers to an individual who is unmarried. He or she may also be a widow/widower, or a married individual who is judicially decreed as legally separated or annulled with no qualified dependents.
2. Head of the Family. It refers to a unmarried or legally separated man or woman with one or both parents, or with one or more brothers, sisters, or with one or more legitimate, recognized natural or legally adopted child/children, living