Individual and corporate taxpayers in the Philippines, who are required to file and pay their annual income tax return, should be done fulfilling their obligation on or before April 15, 2015 to avoid penalties for late filing. With three months time remaining (as of this post) before the due date, taxpayers and their accountants still have enough time to prepare and ensure that their ITR will be filed and their taxes will be paid early.
To help our readers prepare for their 2014 annual income tax returns and avoid penalties for late and incorrect filing, we’ve asked the Bureau of Internal Revenue (BIR) to give us some tips for the preparation and filing of ITR in April 2015.
Atty. Maria Isabel Quiminales Barcia-Utit, OIC/Asst. RDO of RD 14-Bayombong, Nueva Vizcaya, was generous enough to share the following list of useful tips to us.
1. Use the e-BIR Forms.
2. 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.
3. Taxpayers (TPs) who belong to Taxpayer’s Account Management Program should file thru EFPS facility.
4. TPs with transactions with the government should also file thru EFPS facility.
5. Ensure that all payments subject to withholding taxes are properly withheld and remitted. Otherwise, any payment subject to withholding tax of which no tax was withheld or remitted will be disallowed deduction for income tax purposes.
6. Those claiming tax exemption must attach their certificate of tax exemption.
7. Ensure that the TIN Number is properly indicated.
8. Properly fill out all applicable spaces.
9. Sign the ITR.
10. Attach Financial Statements.
11. Attach Statement of Management Responsibility.
12. Financial Statements (for those with gross sales of P150,000.00 in any given quarter) must be duly audited by a BIR accredited independent auditor.
13. Auditor’s report should form as an integral part of the audited Financial Statements and must be attached to the ITR.
14. Ensure that all claimed qualified dependent children are registered with the BIR as TPs Qualified Dependent Children.
15. Only one of the spouses is allowed to claim additional exemption for qualified dependent children (QDC). Generally, 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.
16. 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
17. Ensure that TP and his line of business(es) is/are registered with the BIR.
18. File only with the RDO where the taxpayer is registered.
19. 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
20. Purely compensation income earners need not file their ITRs if they qualify to ALL of the following criteria:
a. Purely compensation income earner
b. Only one employer during the taxable year
c. Taxes are properly withheld and remitted, i.e., tax withheld=tax due
d. 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
21. Purely compensation income earners who are qualified under the substituted filing of ITR need NOT file ITR but they MAY OPT to file ITR.
22. ITRs are to be filed in 3 copies only except for corporations or cooperatives which may file ITRs in 5 copies.
23. And finally, file and pay early to avoid cramming and long queue.
For more information, please visit the official website of the Bureau of Internal Revenue.
New and subsequent BIR rulings, issuances and or laws may render the whole or part of the article obsolete or inaccurate. For more updates, please inquire or consult with the BIR officer in the Revenue District Office near you.