A lot of people have been asking me how to file 1701Q. Personally, I use Taxumo for filing my 1701Q, because it’s the easiest way to compute, file and pay taxes. Full disclosure, I am one of the founders of Taxumo. The reason why we created Taxumo is to help people pay their taxes online.
Business owners, licensed professionals (i.e. doctors, interior designers, etc.) and non-licensed professionals (i.e. consultants, freelancers, etc.) can pay their taxes while focusing more on running their businesses and careers. Accountants can service clients who are far from them and will have no limitations as to how many clients they will service. They can scale their businesses, too!
Our dream really for Taxumo is to help everyone become more productive by giving them back more time to do the things that they love, the things that they are good at and the things that they can earn from.
Okay… the frequently asked questions recently are how to file 1701Q for the first quarter? How do I opt in to the new 8% GRT option for those earning gross revenue of Php 3 Million pesos and below for the entire year?
For the sole purpose of this article, we will only tackle the 1701Q forms for Sole Proprietors, Licensed and Non-Licensed Professionals. I won’t be able to tackle 1702 since this form is used by Corporations and Partnerships.
What is 1701Q and 1701?
These are BIR forms for you to pay your Income Tax. The way income tax is computed is to get the taxable income which is Gross Sales minus Gross Purchases. Then the taxes are based on a tax table if you chose the Graduated IT Rate (and chose Itemized or Optional Standard Deduction).
With TRAIN or the new tax law, there is a new option for this who are earning Php 3 Million Gross Receipts / Revenue per year or less. This is the 8% Flat Income Tax Rate. The computation is based on your gross sales less exemptions.
How do I file my 1701Q for the First Quarter using Taxumo?
First of all, create an account in https://www.taxumo.com. The details that you need to place when you create an account should be based on your Certificate of Registration (COR) so keep a copy beside you and also have a soft copy (picture or scanned copy) available in your computer.
You will then be directed to a blank DASHBOARD.
Click on the Company Profile tab on the left side of the screen. Please make sure that all details are correct (ex. Taxpayer’s name is how it is written in your COR — an individual’s name is written as LAST NAME, FIRST NAME MIDDLE NAME). Just copy how it is written on your COR.
For filing your 1701Q, make sure that you have chosen the correct ATC or Alphanumeric Tax Code. First, you determine whether you’re Business Income, Income from Profession, or Mixed Income: to do so remember how you registered in the BIR.
- If you are earning compensation income (from an employer who withholds compensation taxes and gives you a Form 2316) AND earning income from either business or profession, then you fall under “Mixed Income”
- If you presented DTI and a Business Permit when you registered and you registered as a Sole pProp in the BIR, then you fall under “Business Income”
- If you got an Occupational Tax Receipt or Professional Tax Receipt as part of registration or you did not submit any Business Permit to the BIR when you registered, then you under “Income from Profession”
Then now comes the choice if you want to avail or “opt-in” to the 8% Income Tax Flat Rate. If you want to avail of it, then choose the appropriate ATC with the 8% indicated. We will take care of helping you opt-in with the BIR.
*Some users, aside from opting-in to 8% via the first 1701, ask their BIR RDO to have it indicated in their COR or Certificate of Registration. If you want this, you can go to your RDO and ask the officer of the day if this is possible.
Also, don’t forget to set the Deduction Method.
The rule to follow:
If your Expenses > 40% of your income, Itemized is the more tax efficient choice.
If your Expenses <= 40% of your income, OSD is the more tax efficient choice.
The income source for people who have no day jobs is “solely from business”. Those with day jobs or local employers issuing 2316 forms and with employee contracts are “mixed from business & employment”.
Then choose if you are a Single Proprietor or Professional.
A lot of people ask about “DISPLAY FORMS FROM” also. Indicate here the date when you got your Certificate of Registration from the BIR. Then for uploading of a copy of the Certificate or Registration and Digital Signature, you can go back to this on a later date. This is not required by TAXUMO.
Now, you can start encoding your income and expenses. To file 1701Q- Quarter 1, make sure that you encode January to March income and expenses.
Don’t forget to add and encode the 2307 forms that you have at hand. Click on Withheld Tax then click on Received.
Click on Add Record. BTW, please have a picture or scanned copy of your 2307s in your computer / device before adding them here.
Just copy the details then click SUBMIT.
Once you are done encoding Income, Expenses and your Withheld tax forms, you can go back to your Cashflow Dashboard. On the right side of the screen, you will see your TAX CARDS. These are the taxes that you need to pay from the date when you received your Certificate of Registration. If you have filed some of these taxes offline or not via TAXUMO, just click on “Mark as Paid / not applicable”,
Do note that you can pay your Tax Dues with already computed BIR compromise, surcharges and penalties for tax dues a year prior to today.
One of the boxes that you will see is labeled Quarterly Income (Q1 Jan – Mar). This is the TAX CARD for 1701Q – First Quarter. To file it, click on “File now”. This screen will show.
Once you have filled that screen out, TAXUMO will show your tax dues. Most of us Sole Proprietors and Professionals will probably have Zero or Negative Filing for this quarter. This is because the Php 250,000 exemption is taken into account in the computation of your income taxes. So don’t panic! haha! 🙂
To pay your 1701Q, you can choose any of the available options. For each option (except PayPal/Credit Card), an email instruction will be sent by DRAGONPAY. Please be sure that you key in your correct email address when it is asked. The instructions will be sent there. Read carefully and just follow the steps indicated.
Once you’ve paid and followed the instructions via email, you’re done! You have just filed your 1701Q – Q1. Hope this article helps you out and answers our most pressing question this month on how to file 1701Q. 🙂
BTW, you will see the form, BIR confirmation and Payment confirmation in the “Past Filings” tab. If the status is still in processing, this means that you’re all done. Next steps are with us. Taxumo will be processing the forms in batches to make sure that we don’t “clog the pipes” of BIR, so to speak. Rest assured that your filing will be completed on or (more likely) before the tax deadline.
That’s it and I hope this article helped you out! 🙂
File away! #TimeforTaxumo
