Guide to BIR Filing for Professionals, Freelancers and Sole Proprietor

This is the utimate guide to BIR filing for taxpyers whose Income is 3M and below and belongs to category under Professionals, Freelancers and Sole Proprietor.

SELF-EMPLOYED TAXPAYER

Who are the taxpayer considered as Self-employed Taxpayer ?

• Self-employed workers are those who work on their own account or with one or a few partners or in cooperative. In these jobs, the remuneration is directly dependent upon the profits derived from the goods and services produced by the person running the livelihood.  
• Self-employed individuals may register as either single proprietor or entrepreneur (other than marginal income earners or those earning less than ₱ 100,000 annual gross revenues), or as professionals.
• Professionals who are classified as self-employed are individuals who are practicing their profession, with or without license under a regulatory board or body. They receive payment only for the service that they do, but they don’t receive benefits and compensation because they aren’t employees. Examples of self-employed professionals are private practice physicians, lawyers, and even accountants who are basically on a pay-per-service basis.
• Freelancers are considered as professionals despite not being governed by a regulatory board or body. As is the case of bloggers, web developers, graphic designers, writers and other people who provide specialized services.

BIR’s definition of self-employed

• Persons engaged in business and who derive their personal income from such business
• Professionals such as (1) “persons who derive their income practicing their profession” like lawyers, and those registered with the Professional Regulation Commission (PRC) such as doctors, dentists, certified public accountants, and others; and (2) those “who pursue an art and make their living therefrom,” including writers, athletes, and others. Freelancers and home-based service providers also fall under professionals.

FORMS to FILE 

BIR Form 1701-AIF

This should be accomplished by self-employed individuals, estates, and trusts engaged in trade and business. This simply contains the taxpayer’s relevant information.

*BIR Form 1901 (Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts)

This form is for self-employed and mixed-income individuals, estates, and trusts. You have to settle this one to register your business to BIR.  

* Need a hand with Business Registration or updating of your COR? Click HERE

BIR Form 1900 (Application to Use Loose-Leaf / Computerized Books of Accounts and/or Accounting Records)

This is for freelancers and professionals who want to use loose-leaf, computerized books of accounts, or accounting records. You have to submit this to your RDO.

BIR Form 1906 (Application for Authority to Print Receipts and Invoices)

You should get this form first before you can print and issue receipts to your clients.

BIR Form 1701 (Annual Income Tax Return for Self-Employed Individuals, Estates and Trusts)

This is for your annual income tax return. You have to file this on or before April 15 of each year.

BIR Form 1701Q (Quarterly Income Tax Return)

This must be accomplished by entrepreneurs, professionals, freelancers, and mixed-income earners. This should be settled quarterly.

Filing dates:
1st quarter: On or before May 15 of the current year
2nd quarter: On or before August 15 of the current year
3rd quarter: On or before November 15 of the current year

You can read more on how to file BIR Form 1701Q HERE.

BIR Form 2551Q (Quarterly Percentage Tax Return)

Under TRAIN, non-VAT freelancers must file their percentage tax on a quarterly basis. Instead of using the 2551M and filing it monthly, you’ll use the 2551Q.

BIR Form 0605 (Payment Form)

Every time you pay taxes and fees that do not require the use of a tax return, you have to use this. This includes second installment payment for income tax, deficiency tax, delinquency tax, registration fees, penalties, and advanced payments.