Case (Individuals)Case (Individuals)::

Mrs. Eman is a relict woman, she works in Mrs. Eman is a relict woman, she works in private company with monthly salary private company with monthly salary 1850 NIS, She has three sons and lives in 1850 NIS, She has three sons and lives in a rent house 8500 NIS annuallya rent house 8500 NIS annually

Required: calculate the income tax to be Required: calculate the income tax to be paid (the exchange rate 5 NIS)paid (the exchange rate 5 NIS)

Note : in this case we have family woman, Note : in this case we have family woman, and she will have all the exemption have and she will have all the exemption have been given to the family manbeen given to the family man..

Annual income 1850*12/5 = 4440$Annual income 1850*12/5 = 4440$..Net income = 4,440$Net income = 4,440$Less: ExemptionLess: Exemption

--Resident 3000$Resident 3000$--Husband (dead) 0Husband (dead) 0

--Sons 1500 (3*500)Sons 1500 (3*500)--Rent 1700Rent 1700

Total Exemptions= 6200$Total Exemptions= 6200$So, income tax is 0$So, income tax is 0$..Because the exemptions are more than Because the exemptions are more than the Net incomethe Net income..

AnswerAnswer::

PartnershipPartnership

Case (8)Case (8)::AA taxpayer is a partner in a taxpayer is a partner in a company own 50% of the company own 50% of the capital ,and he has monthly capital ,and he has monthly salary 2500 NIS for managing, salary 2500 NIS for managing, he is married and has three he is married and has three sons one of them study in the sons one of them study in the university and the others in university and the others in schoolschool..

The taxpayer lives with his The taxpayer lives with his father and mother and take father and mother and take care of them, he lives in a care of them, he lives in a rent house 500 NIS monthlyrent house 500 NIS monthly..

The company results for the The company results for the ended year as follow: revenue ended year as follow: revenue and expenses reportand expenses reportDollar = 4 NISDollar = 4 NIS

RequiredRequired : : Calculate the income taxCalculate the income tax..

DrDr

((NISNIS))

CrCr

((NISNIS))

PurchasesPurchases 250,000250,000SalesSales525,000525,000

Begging Begging inventoryinventory

125,000125,000Ending Ending inventoryinventory

60,00060,000

Selling Selling expensesexpenses

17,50017,500

AdministrativAdministrative expenses e expenses (without the (without the

salaries of salaries of partners)partners)

7,5007,500

Salaries for Salaries for partners partners

50%50%

60,00060,000

Rent Rent ExpensesExpenses

7,5007,500

SalesSales525,000525,000

Cost of goods soldCost of goods sold315,000315,000PurchasesPurchases 250,000250,000

Begging inventoryBegging inventory125,000125,000

Ending inventoryEnding inventory((60,00060,000))

Gross incomeGross income 210,000210,000

DeductionsDeductions92,50092,500Administrative expenseAdministrative expense75007500

Selling ExpensesSelling Expenses17,50017,500

Rent ExpensesRent Expenses 75007500

Salary for two partnersSalary for two partners60,00060,000

Net incomeNet income117,500117,500Net income for each partner Net income for each partner isis

117,500117,500**50%50% = = 58,75058,750

Total income for taxpayerTotal income for taxpayer 58,75058,750 + +3000030000 salary (2500*12)= salary (2500*12)= 88,75088,750

Annual incomeAnnual income 88,750/488,750/4 = =22,187.50$22,187.50$

ExemptionsExemptions9500$9500$ResidentResident3000$3000$

WifeWife500$500$

Son *2Son *21000$1000$

University studentUniversity student2500$2500$

Father and motherFather and mother1000$1000$

Rent house 500*12/4Rent house 500*12/4 1500$1500$

Taxable incomeTaxable income 12,687.5012,687.50

10,00010,000**8%8%= = 800$800$

2687.502687.50 * * 12%12% = = 322.50322.50

Paid income taxPaid income tax1122.501122.50

Assume the given information for Assume the given information for sharing company ( Cooperation )sharing company ( Cooperation )!!

What is the main differenceWhat is the main difference??

The same situation without The same situation without exemptionsexemptions

Net Income 117,500/4 = 29,375$Net Income 117,500/4 = 29,375$..

income taxincome tax::

29,37529,375* * 15%15%= = 4406.254406.25