Are you a freelancer or an entrepreneur?

If you are registered with BIR and you use official receipts in your transactions, you need to file and pay your taxes to avoid penalties.

If you are a newly-registered freelancer or an entrepreneur, I’m sure that like me, figuring out how to pay your taxes and where to pay it is one major concern every time you need to file and pay a return.

I was, to be honest, confused when I had to file and pay my taxes during the first and second quarters after I have registered.

I was not given proper instruction and ample information by the BIR staff who processed my registration last year. The only instruction given to me after I submitted my application for COR (Certificate of Registration) was to come back once my COR is ready for pick up. I was not informed that there is a seminar or training that I need to attend. I was not informed of the schedule either.

Thanks to Facebook and for being in Facebook groups for freelancers and business owners, I was alerted when it was already time to pay for my taxes.

The first time that I filed and paid for my tax was during the last quarter of 2018. Since the computation of my quarterly tax at that time was simply getting 3% of the total of my gross income or the total reflected in my receipts for that quarter, I opted for manual filing. I simply printed the form and paid in an accredited nearby bank. It only took me around 20 minutes to line up and pay at BPI. Commuting to the bank from my place was around 30-45 minutes. I was happy that I got to comply with the BIR requirement in less than a half-day.

But the following year, when I needed to file again, I learned that I can opt for the 8% tax rate, which would enable me to be exempt or to not pay percentage tax. I will only pay income tax IF I earn beyond P250,000 within the year.

I thought that this would simplify things for me. So, I decided to choose this 8% option.

True enough, I no longer paid anything in the past two quarters since I chose this option. But since I was still required to file, I had to find an easy and affordable way to comply with this BIR requirement.

That’s when I learned about the eBIR forms.

What are the eBIR Forms?

Let me share what is on the BIR website:

“The Electronic Bureau of Internal Revenue Forms (eBIRForms) was developed primarily to provide taxpayers with an alternative mode of preparing and filing tax returns that is easier and more convenient. The use of eBIRForms by taxpayers will improve the BIR’s tax return data capture and storage thereby enhancing efficiency and accuracy in the filing of tax returns. Through the use of the downloadable eBIRForms Software Package (also known as the Offline Package), taxpayers and Accredited Tax Agents (ATAs) will be able to fill up tax returns offline and submit it to the BIR through the Online eBIRForms System.”

There are two (2) packages that you can choose from: Offline eBIR Forms Package or Online eBIR Forms System. Again, I will lift exactly from BIR’s website so as not to make any mistake in describing these two.

Offline eBIR Forms Package

“The Offline eBIRForms Package is a tax preparation software that allows taxpayers and ATAs to accomplish or fill up tax forms offline. Instead of the conventional manual process of filling up tax returns on pre-printed forms that is highly susceptible to human error, taxpayers/ATAs can directly encode data, validate, edit, save, delete, view, print and submit their tax returns. The package can do automatic computations and has the capability to validate information encoded by taxpayers/ATAs. After filling out the forms in this package, taxpayers/ATAs can submit it to the Online eBIRForms System.”

Download the Offline eBIRForms Package v5.2  here. After downloading it, you need to install it on your computer. Then, just follow the instructions that will be given to get it running.

Online eBIR Forms System

“The Online eBIRForms System is a filing infrastructure that accepts tax returns submitted online and automatically computes penalties for tax returns submitted beyond due date. The System creates secure user accounts for taxpayers, ATAs and Tax Software Providers (TSPs) for use of the online System, and allows ATAs to file on behalf of their clients. The System also has a facility for TSPs to test and certify the data generated by their tax preparation software (certification is by form). It is capable of accepting returns data filed using certified TSP tax preparation software.”

“You may eFILE your tax returns using the eBIRForms package.  Fill-up the required form, validate and click the ‘FINAL COPY’ button.”

There are 36 forms covered in this system. So far, I have only used less than 5 since I started using them. You can find the list of forms available in the system when you click here.

Why I Like Using eBIR Forms

Now, let me tell you why I like using these forms.

1. Using the forms lessened my questions and confusion compared to manual filing because some of the fields that are not applicable to me are already off-limits to me. The system and the forms are designed in such a way that I only fill up the fields that I need to fill up. Those that are not relevant or I should not fill up, I cannot access. Moreover, the system fills up the form with available data that I have encoded when I registered. So, it automatically fills up the form using previous information that was inputted in the system. That means fewer errors for people like me who have yet to attend a seminar on filing and paying income taxes organized by the BIR.
2. It’s budget-friendly! I don’t need to pay anything to use it. I can use it from the comforts of my home office. I don’t need to spend on transportation expenses or food and drinks if I get hungry or thirsty while filing and paying for my taxes. The money that could have been spent on these things can be used to pay for my taxes if I need to pay for anything. Because the forms were simplified by the system, I didn’t need to hire CPAs or Certified Public Accountants to compute, file and pay for my taxes! I saved thousands because of this tool!
3. It saves me a lot of time! This, I think, is the BIGGEST benefit of using this system. When I was not yet using this, I would spend so many days trying to find out, research and learn how to compute my tax and fill up forms. I have asked many people in the Facebook groups I was a part of. I almost hired CPAs to do my tax filing for me. I’m so grateful I discovered this tool because it not only saved me thousands, it also saved me time. Now, in the past quarters, I only spent around a day trying to figure out how to fill up a new form. Then, once I am able to fill it up correctly, I get to submit and file it in minutes. Within the same day, I get an email notification from BIR confirming my submission. Isn’t that great?
4. Lowers my stress level! Complying with tax requirements surely gives most of not all registered freelancers and business owners during tax season or whenever a deadline is coming up. We surely do not want to pay any penalties or have tax cases. Thus, we do our best to comply on or before the deadline. Discovering and using the eBIR Forms is a lifesaver for me! It has made it easier for me to file and pay my taxes before the deadline.
5. Last but not least, I feel empowered filing and paying for my taxes. Like what I said earlier, there was a time when I felt so confused and I was seriously considering hiring an accountant to do this for me. Learning how to compute, file and pay for my taxes made me feel good and empowered. Now, I can more confidently comply with this requirement because this tool makes it easy for me.

Yesterday, I just filed for my quarterly income tax. The deadline for this is on August 15. Again, I learned about this requirement from a Facebook group for entrepreneurs. I checked the system and looked for the form that I needed to file for this quarter. I needed to use 1701Q. This has an old version and a newer version. We should use the new version, 1701Qv.2018.

Like in the previous times and quarters, I only spent less than half a day to figure out how to fill-up the form. Then, it took me just a few minutes to submit it. I didn’t have to leave my home office. I didn’t have to spend on food and drinks or transportation. I didn’t have to pay an accountant to do it for me. I felt relieved and ecstatic after submitting my form and after receiving the email confirmation.

I didn’t have to go to the bank to pay because my tax credits from the previous year were not yet used up. Also, the income from my receipts has not yet gone beyond P250,000 as of the second quarter.

If you are still confused, filing manually or outsourcing this requirement to another person or company, I invite you to check out the eBIR Forms and try to do it on your own.

I also invite you to join groups or forums where there are people who willingly share helpful information to newbies like us. I used to file my tax returns in the past manually when I first registered my business. But with the TRAIN law and the changes in the system, it can get confusing. I’m really thankful that BIR found a way to make it easier for taxpayers to comply with their requirements.

You still have a few days left to try it. In case you have any questions, feel free to comment here on my blog post. I will do my best to help you out.

Hope you get to file and pay your quarterly income tax on time!