Thursday, January 8, 2009
PREMIUM PAYMENTS ON HEALTH AND/ OR HOSPITALIZATION INSURANCE
The following conditions must be met:
1. The insurance shall be taken by the individual taxpayer himself for his family;
2. The amount being claimed shall not exceed P2,400.00 a year or P200.00 a month per family;
3. The family has a gross income of P250,000.00 or less for the taxable year.
For married taxpayers, only the spouse entitled to claim for additional exemption is allowed this deduction
Illustration:
Angelu, a single mother, is a government employee who earns a monthly gross compensation income of P18,000. Effective, January 1, 2009, she took a hospitalization insurance for her and her 3 year old son. She right away paid the annual premium of P2,400.However, had she opted to pay this premium monthly, an additional P50.00 pesos per month is charge. Is she entitled to the deduction? If so, How much??
The first condition that the insurance shall be taken by the individual taxpayer himself for his family has been satisfied.
The second condition speaks for the annual limit of P2,400 and monthly limit of P200.00 for each family. The actual premium paid by Angelu for the whole year was P2,400. This qualifies her to claim the maximum P2,400. Of the annual premium were lower than P2,400, the lower amount shall be allowed. Had she chosen to pay the premium monthly, the total payment would have been P3,000 (250 X 12). If this is the case, she can only claim P2,400- the maximum limit.
The third condition is likewise satisfied. The family gross income, she being the sole bread winner, is 216,000, far lower than the 250,000 maximum gross income limit.
Premium payments on health and or hospitalization insurance may be deducted from the gross business/professional income or from the gross compensation income of a resident citizen, non-resident citizen and resident alien.
Rules on Change of Status
Tax Notes
January 6, 2009
Rules on Change of Status
1. If the taxpayer dies during the taxable year, his death shall not affect the amount of personal and additional exemptions his estate may claim. It is as if he died at the end of such year;
2. If the taxpayer marries or should have additional dependents during the taxable year, he may claim the personal exemption of a married individual for such year.
3. If the spouse dies or any of the dependents dies or becomes 21 years of age, or gets gainfully employed during the taxable year, the taxpayer may still clain the same exemption as if the change occurred at the end of the year.
January 6, 2009
Rules on Change of Status
1. If the taxpayer dies during the taxable year, his death shall not affect the amount of personal and additional exemptions his estate may claim. It is as if he died at the end of such year;
2. If the taxpayer marries or should have additional dependents during the taxable year, he may claim the personal exemption of a married individual for such year.
3. If the spouse dies or any of the dependents dies or becomes 21 years of age, or gets gainfully employed during the taxable year, the taxpayer may still clain the same exemption as if the change occurred at the end of the year.
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