Easy Income Tax Survival Guide for Virtual Assistants (2024)

As a diligent virtual assistant, it’s essential to be mindful of your tax obligations. Even if you work remotely or have an overseas employer, it’s crucial to remember that paying your annual income taxes is a major responsibility. According to accounting services in the Philippines, staying compliant with tax regulations ensures you contribute positively to the community and the country’s growth.

It’s also vital to be proactive in fulfilling your tax duties to maintain a smooth and responsible professional journey. If you are a virtual assistant who feels intimidated by being solely responsible for managing your own taxes, let this be your guide. Taxation is indeed complex but if you know what to do, it will ease your burdens.

Categories Exempted

Expert tax services in Manila share that section 74 of the Philippine Tax Code says virtual assistants like you are obliged to pay taxes except if you fall under any of the following categories:

• minimum wage earner
• total income received is below basic personal exemption (PHP 50,000)
• Annual salary is PHP 60,000 and below

Requirements

1. TIN or a Tax Identification Number
2. BIR Form 1905

This form will be used for those who already have a TIN to declare a shift in employment.

Follow the steps below to properly fill out your BIR Form 1905:

• Fill in your full name, TIN, and Revenue District Office (RDO)
• Mark “letter E” on Part II
• Mark “Transfer of Home RDO” and put your new address and telephone number on Field 4E
• Sign and put your official title on Field 5

3. BIR Form 1901

This BIR form will be used as your registration form.

Follow the steps below to properly fill out your BIR Form 1901:

• Select “Single Proprietorship” for Taxpayer type
• Fill in necessary details (full name, TIN, etc.)
• Mark “Income Tax” and “Other Percentage” as your source of income and write self-employed on the box for specificity.
• If you have transactions that cost PHP 25 and above, you are mandated to issue a receipt and use a Cash Receipt Journal and a Cash Disbursem*nt Journal. Under “type of books to be registered,’ login in the “registration of books of accounts.”
• If you are married and have four children, you must fill out your civil status in part II and declare your children’s names in part III under the “additional exemption.”

4. BIR Form 0605

The BIR Payment Form 0605 will be the form you will use to pay your fees and taxes due that don’t require tax returns.

Follow the steps below to properly fill out your BIR Payment Form 0605:

• Fill in necessary details (full name, TIN, etc.)
• In the “manner of payment section,” Mark “others (specify)” and on the provided space, write “Certificate of Registration.”
• Fill out three copies. It will be used to pay for your certificate of registration.

5. Company Contract (if applicable)
6. Mayor’s Business Permit Photocopy (if applicable)
7. Marriage Contract (if applicable)
8. Occupational Tax Receipt (if applicable)
9. Professional Tax Receipt (if applicable)

Step-by-Step Registration Process

1. Submit your filled-out BIR Form 1901 at the RDO along with the other requirements.
2. Settle the registration fee of PHP 500 at the BIR Office or at any authorized bank.
3. Pay for your DST and certification fee each amounting to PHP 15
4. Attend the RDO initial briefing to enlighten you about tax compliance
5. Receive your BIR Form 2303 or COR along with the ATP or authority to print, book of account, and the “Ask for receipt” notice.
6. Present your requirements for ATP with your book of accounts at the RDO for stamping.

Taxes You Need To Know

Monthly Percentage Tax Return

• BIR Forms 2551 and 0605
• 3% of your total income income
• File on the 20th of the month
• Pay at any BIR-authorized banks

Quarterly Income Tax

• BIR Forms 1701Q and 0605
• Will be determined from your net income
• File on April 15 of the following year

Annual registration Tax Renewal

• BIR Form 0605
• File every 30th of January

Annual Income Tax

• Bookkeeping services in the Philippines reiterate that everyone is mandated by law to claim a deduction amounting to PHP 50,000 from their gross yearly earnings. To compute your annual income tax, you must deduct your annual earnings from your personal exemption amount.
• If you are married and have children, you can enjoy an additional deduction of PHP 25,000 up to PHP 75,000. For example, you earn PHP 120,000 annually. To compute your annual income tax, deduct your yearly earnings of PHP 120,000 from your personal exemption amount of PHP 75,000 and then, multiply the difference by the OSD or the optional standard deduction which is 40%.

120,000 – 75,000 = 45,000

(45,000) (40%) = 18,000

Therefore your annual income tax amounts to PHP 18,000.

If you find yourself tangled in the complex web of tax obligations, fear not! Our expert accounting services in Pasig are here to swoop in and save the day. Don’t struggle alone; let us handle the tricky stuff while you focus on being the exceptional virtual assistant you are. Whether it’s untangling your BIR forms, optimizing deductions, or mastering your income tax, our team of tax-savvy professionals is ready to assist you. So, don’t wait for any tax troubles to strike – reach out to us now and experience the relief of having your virtual assistant stuff fixed with ease. Your financial peace of mind is just one call away. Contact us today!

Tags: accounting services, income tax, start up business