TAX SEASON 2015 – Things You Need to Know About Income Tax Filing

April 15 is fast approaching and most of the tax payers and accountants in the Philippines are used in cramming and filing on deadline. To avoid rush and queue in filing, here are some of the simple guidelines on how to file an income tax return for an individual/professionals:

INDIVIDUAL WITH EMPLOYER

Individuals earning purely income need not file their ITRs if they qualify to ALL of the following criteria:

o   Purely compensation income earner

o   Only one employer during the taxable year

o   Taxes are properly withheld and remitted

o   If married, both spouses qualifies with the first 3 requirements. If one of the spouses is disqualified, both spouses are disqualified and therefore, both spouses are required to file ITR

Purely compensation income earners who are qualified under the substituted filing of ITR need not file ITR but they may choose to file ITR.

Documents needed:

  1. BIR Form 2316
  2. If applicable: Waiver of the husband’s right to claim additional exemption; duly approved tax debit memo; proof of foreign tax credits.

How to file:

Use the e-BIR Forms

Fill up BIR Form 1700

If there is payment:

  • Proceed to authorized agent bank of Revenue District Office where you are registered and submit the filled out E-BIR Form and supporting 2316
  • Receive duly stamped and validated form as proof of ITR filing.

If there is no payment:

  • Proceed to Revenue District Office where you are registered and submit the filled out BIR form and attached Form 2316
  • Receive copy duly stamped as proof of ITR filing.

SELF-EMPLOYED INDIVIDUALS & MIXED INCOME EARNERS

For self-employed individuals; for individuals deriving mixed income. Below are the guidelines:

  1. Ensure that the individual tax payer and his line of business/profession is registered with the BIR.
  2. Spouses are encouraged to jointly file their ITR. However, if one of the spouses is registered in another RDO, the spouses have to file separately with their respective RDOs.
  3. Only one of the spouses is allowed to claim additional exemption for qualified dependent children (QDC). Normally, it is the husband who claims the additional exemption for QDC unless he waives in writing in favor of the wife (waiver is acknowledged by both the employers of the husband and the wife, if employed) or if the husband is not gainfully employed or an OFW.
  4. Make sure that all claimed qualified dependent children are declared with the BIR as individuals Qualified Dependent Children.
  5. Premium paid on health insurance not exceeding 2,400 in a year is an allowable deduction provided that the gross family income do not exceed 250,000. Provided further that the spouse who claims for the additional deduction is the one claiming the QDC and the one who paid the premium.

Documents needed:

  • If applicable:

o    Certificate of BIR Form 2316

o    Certificate of  BIR Form 2307

o    Certificate of BIR Form 2304

  • Tax debit memo, proof of prior year’s excess tax credits, if any.
  • If gross quarterly sales, earnings, receipts or output exceed Php150,000: Account Information Form (AIF) and/or the certificate of the duly audited by a BIR accredited independent auditor with Audited Financial Statements.
  • Auditor’s report should form as an integral part of the audited Financial Statements and must be attached to the ITR.
  • Statement of Management Responsibility.

How to file:

  • Use the e-BIR Forms
  • Fill up BIR Form 1701
  • Properly indicate the individual Tax Identification Number(TIN).
  • Properly fill out all applicable spaces
  • Attach proof of payment of Quarterly ITRs and previously filed return (if amended), Withholding Tax Certificates, Certificate of Tax Exemption (if applicable), SAWT, Alphalist of Payees, bank certificate of loan & interest payment, schedule of taxes and licenses
  • Make sure that tax was withheld for all expenses subject to withholding taxes otherwise these expenses will not be deductible for income tax purposes.
  • Those claiming tax exemption must attach their certificate of tax exemption.
  • Sign the ITR.
  • File only with the RDO where the individual is registered.

If there is payment:

  • Proceed to authorized bank of Revenue District Office where you are registered and present your filled out BIR form and your documentary requirements.
  • Receive duly stamped and validated form as proof of ITR filing.

If there is no payment:

  • Proceed to Revenue District Office where you are registered and present your filled out BIR form and your documentary requirements.
  • Receive copy duly stamped as proof of ITR filing.

Deadline of filing: April 15, 2015.

Reference: www.bir.gov.ph

Disclaimer: New and subsequent BIR rulings, issuances and/or laws may render the whole or part of the article obsolete or inaccurate. For more information, please inquire or consult with the BIR.

 



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