Tax season is a time when people generally scramble to get their forms in order and pay their taxes on time. There is also a marked difference between tax returns for those who are self-employed and those who are employed by a company. One such difference is that people employed by a company usually get their taxes filed for them as per regulation. Those who are self-employed, professionals, consultants or freelancers will need to file their ITR forms on their own. Given the timesink that form filing and calculating taxes can be, here’s a few things that can help get you started.
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For individuals who have mixed income or are self-employed, the ITR Form that you will need is BIR Form 1701 which – according to the BIR – “shall be filed by individuals who are engaged in trade/business or the practice of profession including those with mixed income (i.e., those engaged in the trade/business or profession who are also earning compensation income) in accordance with Sec. 51 of the Code, as amended. The annual income tax return summarizes all the transactions covering the calendar year of the taxpayer.”
There are a number of things that you’ll need before accomplishing your BIR Form 1701, as these are required documents that will need to be attached to the actual form and your basis of your computations:
As you calculate your total taxes, note that certain Exemptions, defined as “ a monetary exemption which reduces taxable income. Tax exempt status can provide complete relief from taxes, reduced rates, or tax on only a portion of items”, will apply.
A PHP 50,000 Exemption is applicable to the following:
From here on out, you’re well on your way to getting your taxes completed. Remember, the deadline for filing is on the 15th, so the sooner you finish your ITR, the faster you can get it filed. For a little more information, here’s a handy infographic to help you along:
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