Last Updated on March 1, 2019 by Marie Bautista
Comments awaiting moderation on my posts on Income Tax Filing have reached over a hundred and I am having a hard time scrolling through the posts to answer the questions in the comment box because the comments have reached over 600 already.
To solve this, I will be publishing your tax questions every Tuesday under Taxation Tuesday. You can reach out to me for any of your #taxquestions in my comment form with hashtag #AskTheTaxMaven.
Learn how to compute your INCOME TAXES HERE
Here are some of your #taxquestions:
Hi! I have a question. I am employed by a company, but I was hired to be a model for a commercial. The talent agency deducted 10% from my talent fee and they told me it represents tax on my talent fee. How can I file my income tax on that talent fee? Thank you! Jet Silva on How to File Your Income Tax Return
You will be considered to have mixed income – meaning you have compensation income (since you are employed by a company) and professional income (talent agency hired you as their professional talent. In this case, you will be required to file BIR Form 1701 on or before April 15 following the taxable year when you received your income. You will declare your compensation income plus your professional income and deduct personal and allowable exemptions and deductions. You can deduct from your Income Tax Due the tax withheld from your salary (Attach your BIR Form 2316) and the 10% deducted from your talent fee (BIR Form 2307 to be given by the talent agency to you). Please do take note that since you received income as talent agent, you may also be subject to VAT or Percentage Tax, as the case may be.
Hi Ms. Marie! I am a registered professional filing percentage tax monthly. I just received payment from a client this month (August) but when I asked for the 2307 form, it says my taxes were withheld during the previous month July. I have already filed my 2551M for July before the 20th of this month to avoid the deadline. How do I amend my 2551m to reflect the additional income? When filing an amended return, should I reflect previous taxes already filed in my original 2551m or just the additional income I received this month? Thank you! Anonymous on Penalties for Late Filing and Payment.
You can amend your 2551M since it is allowed by the BIR because taxpayers do commit error, omission or in your case, new information is added to your income tax declaration. In filing your amended return, you reflect the corrected income then deduct any payment you made. Any income that has not been reflected (i.e., your additional income) however is subject to penalties. However, if a Letter of Authority has been issued by the BIR for the same period, you cannot amend your tax return.
Good evening Ms.Marie! I would like to ask some questions regarding my godmother’s business. It’s a fishing vessel business and a proprietorship business to be specific.Since we only sold our fishes to one person who does the wholesaling and retailing to customers.It’s a non-VAT business, right ? And also exempted from VAT?As stated in law it is considered fruits of labor.Does she need to pay business tax as well?or only the quarterly and annual ITR? My other question is, she hired me as her in-charge for tax filing and books recording and I’m paid by monthly basis part time allowance. Can we categorized it as part of expenses?Thank you.There are still more I’m gonna ask later.Thank you. I want to help her. I’m not a CPA but an accounting and finance graduate. Anonymous on {How To File Your BIR Form 1701 Income Tax Return} For Self-Employed Individuals
Section 109 of the National Internal Revenue Code, as amended, lists Sale or importation of agricultural and marine food products in their original state as a VAT-exempt “Marine” means belonging to the sea – relating to the sea or animals and plants that live in the sea. Therefore, marine food products shall include fish and crustaceans, such as, but not limited to eels, trout, lobster, shrimps, prawns, oysters, mussels and clams. Since your godmother’s sale of fish is exempt from VAT, you don’t need to pay any BIR Business Tax (i.e., VAT or Percentage Tax), but you do need to register with the BIR, pay annual registration fee, Quarterly and Income Tax Returns, and Withholding taxes if applicable.
Since your salary is directly attributable to the operation of your godmother’s business, it is allowable as a deduction from gross income.
Hi Ms. Marie! I have my BIR Form 2307 from my employer and we did not know that we need to file for our 2551M, 1701Q, & 1701. If I will file now, do I still need to pay for the surcharge, interest, & compromise penalties or compromise penalties only since our taxes have already been withheld? Anonymous on Penalties for Late Filing and Payment of Your Income Tax Return in the Philippines
BIR Form 2307 is a Certificate of Creditable Tax Withheld at Source. This is a certificate accomplished and issued to recipients (i.e., you) of income subject to expanded withholding tax. The expanded withholding tax will be paid by the payor (the one who gave you your payment). The certificate contains the monthly breakdown of the total income payments made to you and the total taxes withheld and remitted during the quarter/period. This Certificate should be issued to you on or before the 20th day of the following month following the close of the quarter (eg. your certificate for the first quarter (January to March) should have been issued to you between April 1 to 20). However, You should be furnished such statement simultaneously with the income payment.
Please do take note that the tax withheld from you is only an approximation of how much tax you are going to pay on such income payment. This withholding tax (as long as you have the Certificate) shall be allowed as a tax credit against your income tax liability in the taxable quarter or year in which the income was earned or received.
Example: Your Income Tax Due after computation is P15,000.00 Your Certificate of Creditable Tax Withheld at Source states that P9,000.00 has been withheld from you. Assuming that you made no other payments and that there are no tax credits, your Net Income Tax Payable is P6,000.00.
Since the Tax Withheld from you is Creditable, you will still need to file your Quarterly/Annual Income Tax Return (BIR Forms 170Q/1701). And yes, you still need to pay your 2551M. By the way, if the tax withheld from you is Income Payment subject to expanded withholding tax, this means that the withholding tax is deductible from your income tax. Please don’t deduct it from your BIR Form 2551M.
For more information visit https://www.
And yes, you are subject to statutory penalties for late filing/late payment.
Hello. I have a question. I made a mistake in declaring my earnings in my 2551M eBIR form. I accidentally declared I have zero income from the previous month. What am I supposed to do?
You can amend your return
Hi Ms. Marie,
I'm a recent graduate who took a gap year after graduating from college. I applied for a TIN number and was advised to get a COR back in 2014, after graduating. I did minimal freelance work last year, with Form 2307s after each project. Now that i wish to apply for an OR as a self-employed artist, i discovered i have accumulated open cases for not filing and paying taxes since 2014.
How do i settle penalties since 2014, if it wasn't until only 2016 that i was able to get paying projects? They're fining me more than what I've earned from last year, considering the projects that i've worked on have already withheld tax from my talent fee. Is there any way to lower penalties? Since it was only last year that i started getting paid for work, and total annual income does not even exceed 50k.
I hope you can help me. Thank you very much!
I think you were registered as self-employed since you got your COR. Even if you got your 2307, the certificate does not mean your taxes are already paid because what they withheld from you is CREDITABLE (not FINAL) withholding tax, meaning this only approximates the tax that you would have paid. So what they withheld could either be more or less than your tax due. since approximate lang ang tax, you still need to file the required tax returns for the tax types you are registered. If your COR contains info that you are subject to PM (monthly percentage taxes), you are required to still file your monthly percentage tax return. By the way, BIR Form 2307 is income tax withheld, meaning it is tax withheld from your income tax due. This cannot be deducted from your VAT or percentage tax since these are business taxes. I assume you have OPEN cases since you failed to pay your taxes. Sadly, there is still no amnesty for open cases. some taxpayers settle their open cases by paying penalties especially when they need clearance or they need to close their business. Just try to ask from your revenue district office how you can settle the open cases. If you have no income during the period where you have open cases, you can file returns (with no income) and pay the compromise penalty for late filing.
Thank you for your prompt response, Ms. Marie!
Yes, i was registered as a self-employed individual as i wanted to be project-based after college. I recently consulted with my RDO and they asked me to fill-out my open cases' e-forms 2551m, 1601e, 1701 prior to the assessment of fines. I am having difficulty accomplishing the forms as they are highly technical. Would you happen to know a help desk/personnel i can consult with regarding filling-up these forms? Also, you mentioned i can file returns with no income for the duration i took a break, how do i do such?
you can download eBIR forms @ bir(dot)gov(dot)ph. Scroll down, look for eServices, click. it will open to a new page then you click eBIR forms. eBIR forms are auto-populated. It prompts you what to fill up. If no transaction, especially sa 2551M, just put 0
Hello Ms. Marie! Is it possible to amend a 2551M because of a mistake in inputting the year? I have an open case and I found out that I inputted 2015 for my July 2016 2551M.
Thanks in advance!
Yes, you can amend as long as no Letter of Authority to investigate has been issued yet,