Part of running your business are tracking your expenses. BIR allows certain expenses to be deducted to your income. Below are the allowable deductible expenses from BIR.

  • Advertising and Promotions
  • Amortizations
  • Bad Debts
  • Charitable Contributions (Note: Donations should be made to BIR accredited donee institutions, otherwise individual taxpayers can only claim 10% of the donation as deductible)
  • Commissions
  • Communication, Light and Water
  • Depletion
  • Depreciation
  • Director’s Fees
  • Fringe Benefits
  • Fuel and Oil Insurance
  • Interest (Note: The taxpayer’s allowable deduction for interest expense shall be reduced by an amount equal to the 33% of the interest income subjected to final tax. Moreover, all interest incurred or paid to related parties cannot be claimed as deductions to income)
  • Janitorial and Messengerial Services
  • Losses
  • Management and Consultancy Fee (Note: A portion of expenses must be withheld and paid to BIR.)
  • Miscellaneous
  • Office Supplies
  • Other Services
  • Professional Fees (Note: A portion of expenses must be withheld and paid to BIR.)
  • Rental (Note: A portion of expenses must be withheld and paid to BIR.)
  • Repairs and Maintenance-Labor
  • Repairs and Maintenance-Materials/Supplies
  • Representation and Entertainment (Note: Limited to 0.5% of net sales for sellers of goods or 1% of net revenue for seller/provider 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
  • Others (Case to case)

All expenses that you should encode in Taxumo should be related to the business. If you can ultimately reason out why it's related to your business, then you can add that expense.

 

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