RMC No. 16-2010: Requires taxpayers to disclose their election to use the Optional Standard Deduction for taxable year 2009.

Summary

RMC No. 16-2010 requires taxpayers to disclose their election to use the Optional Standard Deduction (OSD) for taxable year 2009.

Key points

1. How to elect. Taxpayers electing the OSD check the appropriate box in the Income Tax Return for the first quarter of taxable year 2009, whether on a calendar or fiscal year. The same type of deduction must then be used in all succeeding quarterly returns and the final return.
2. No election. Failing to indicate the OSD election means itemized deductions under Section 34 of the Tax Code, as amended. A taxpayer required to file the first quarter return but who fails to do so is also treated as having chosen itemized deductions.
3. Newly registered taxpayers. Newly registered taxpayers disclose the election in their initial quarterly Income Tax Return for taxable year 2009.
4. Irrevocable election. The election becomes irrevocable for taxable year 2009 once the return is filed. Amending the first or initial quarter return does not change this.

Who is affected

• Taxpayers electing the OSD for taxable year 2009
• Newly registered taxpayers

Deadlines and effectivity

• Election made in the first quarter return of taxable year 2009
• Irrevocable for taxable year 2009

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.