Mid March 2019, my team (Taxumo) was introduced to the GrabPay team of Grab. We were introduced by Ms. Diane Eustaquio, the Executive Director of Ideaspace. As some of you may know, we were part of Batch 4 of this incubator/accelerator program, and it has helped us a lot in our start-up journey.
I remember the first time we met with the GrabPay (Grab Philippines) team. They really and sincerely wanted to help with the mission of making it easier for every one to pay taxes. After the first meeting, everyone in each of the teams were committed to make this happen.
Since April was a busy season for us, we agreed to start integrations by May 2019. Integrations only took us a month and for marketing, our go-to-market strategies were laid out after.
We’ve actively started promoting our partnership this month (July 2019).
How will this partnership benefit me?
You can get huge savings when it comes to paying your taxes, particularly on the Taxumo processing fees.
For one, when you pay your taxes using GrabPay Credits for the months of July and August 2019, you get Php 100 OFF on Taxumo Processing Fees.
All you need to do are the following:
Step 1: Key in your income and expense receipts in Taxumo then view your Tax Dues Cards to check on the amount of taxes that you need to pay
Step 2: Choose GrabPay as the payment option and click on payment. It will immediately confirm if you have enough balance in your Grab App (GrabPay Credits) so be sure that you have enough GrabPay credits.
Notice that you will automatically have Php 100 OFF.
The second benefit is that you can get more Taxumo Xennies (usually 1 Xenny is equivalent to 1 Peso). Taxumo Xennies can be used to pay Taxumo Processing fees and to upgrade your Taxumo Plans.
You can now purchase Taxumo Xennies using GrabPay Credits. The best deal that you can get is paying Php 250 for 550 Xennies!
So if you really want to upgrade your Taxumo account and have access to our books of accounts view (if you don’t know how to fill out those manual ledgers) or if you want to get around 50%+ off on Taxumo Processing fees, now it the time to STOCK UP ON XENNIES!
Personally, my dream really for these kinds of integrations with partners, is to have a country where you can pay taxes anytime, anywhere. A country where tax payers pay their duties while commuting, while waiting for the next episode on Netflix, while standing in line in the recently opened ShakeShack… basically, anywhere!
We also welcome new ideas that you may have. If you have an idea that you think will work well for Taxumo, message us at firstname.lastname@example.org!
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! 🙂
Doing your taxes is probably one of the most frustrating things every working person does. Even the more veteran people, when it comes to taxes, would find it hard to do when they don’t prepare for it well. In the Philippines, tax computations are one of the things that a lot of people fear, just because of how stressful it can get.
That being said sooner or later, everyone will have to do their taxes as part of their lives. And for those first timers that have no idea how to do them yet, don’t fret, because if you start out early, you might find it easier to do in the future! Plus keep in mind that there are a lot of helpful websites and applications that make it easier for you to do your taxes! That being said, here are some of the most important things that every first-time taxpayer should know.
There are many kinds of BIR forms that are dedicated solely to paying business taxes. For example, there are specifics forms applicable for self-employed individuals, employees of companies, and business owners. And there are forms that are to be used by Partnerships and Corporations.
It’s important that you know which one you should use so that you can fill out the right form and avoid penalties. Freelancers fall under self-employed individuals. We, freelancers, are considered non-licensed professionals. They, along with business owners who are sole proprietors usually do their own taxes. While people that are employed would usually have their companies do their taxes for them.
There are as many steps to the processes as there are BIR forms. Haha! I may be exaggerating, but the what’s for sure is that the steps to be taken take a whole lot of time from a business owner’s day. On the average, a business owner in the Philippines takes 2 days in a month (according to a PWC and World Bank report on taxes) spent just complying with taxes. When starting a business, I highly recommend that one should at least be familiar with the 101s of preparing and submitting your own taxes.
A good example would be to know more about income tax returns. These are forms that need to be submitted as long as you are making some kind of income or receiving compensation. Income is basically your gross revenue less expenses and when you do this, you get your taxable income. This is the basis for your taxes (income tax return). A self employed individual submits and pays for income taxes every quarter (Form 1701Q), the fourth quarter being the “famous” annual income tax (Form 1701 or 1701A).
If you are employed (have a day job) and running a business at the same time, you are considered to be a mixed income earner. How do you report taxes? You will secure BIR Form 2316 from your employer at the end of the year and use the values there and combine it with the income / expenses from your business. You do this only for form 1701 or Annual income tax form.
If you need help in preparing tax form 1701 and 1701A, feel free to check out https://www.taxumo.com and check out their blog. They have useful information for everyone!
The final step is to print out all of these documents and pay for it at the Authorized Agent Bank (basically a bank that accepts BIR payments in the city of your business).
Please prepare 3 copies for all of your accomplished BIR Forms along with the required deposit / bills payment slip and your payment.
In some cases, you won’t be needing to pay anything, and that would entail a “No Payment” Situation. These include refundable/ creditable tax returns, returns with excess tax credit carry over, and returns that are qualified for a second instalment. These “no payment” transactions just need to be filed and stored together with the BIR confirmation via the eBIR Forms system.
This article detailed the very basics of what you need to know about taxes. In the Philippines. Tax computations are frustrating, however, as long as you prepare everything and do it as early as you can, you won’t have a problem with doing your taxes any time soon.
If you need help with understanding all of these still, just ask Taxumo.
P.S. I’m a co-founder of Taxumo, whose mission is to help people start and sustain a business! 🙂 Feel free to contact us!
Never in million years would I have guessed that I would be a TECH STARTUP company co-founder AND focus on online tax preparation. When I was little, I never liked math. One of the reasons why I chose marketing was I assumed it had a few subjects where I had to compute or use a calculator. When I graduated and helped my dad handle the family business, I would be so bored looking at excel spreadsheets that showed profit and loss statements.
I think I only got to love numbers when I joined a bank. Of course, in the beginning, I forced myself to look at spreadsheets and reports containing mostly numbers — all kinds of numbers and computations. Plus, I had to force myself to understand banking language like ADB, MBR, TPR, NPV, TITF, JA, CASA, FLOATS, etc. But, for anyone who knows me, I am a competitive person. I loved the challenge. So when I started understanding number, I found that I loved it and it was “actually” useful! haha! My almost 7 years of service in that bank was the best years of my life. I learned a lot and challenged myself A LOT!
When 2012 came, I went away to seek the life that I wanted, which was to become an entrepreneur. I would watch videos of Marie Forleo, Tyra Banks, Oprah and other influential women on the internet. I really admired each one of them and how they got to where they were. I saw the millions and millions of people whom they have helped. I wanted to be like them. I wanted to see how I could directly help others with a business. This dream was the foundation of Manila Workshops. When I started, it was a challenge getting our name out there. It was even more challenging to manage the “business” side of everything — from sustaining profits, controlling costs and most of all, dealing and paying taxes! I really hated that part.
I would always get stressed it if taxes was the topic. I wished for the longest time that someone would create anything like an online tax preparation system or whatever to make it easier for me. And so, with someone did notice and create a rudimentary system for me. This someone was my husband and my saviour. With this very rough local automation at home, we were able to expand the business of 3 directors to 20 directors.
The TAXUMO Story
And this is where our Taxumo story begins. We wanted to share this process and system with other small business owners, freelancers and professionals. We created a deck of the idea that we had, and started to pitch it to different people and in different competitions. This is where we started, because it seemed that others were doing this as well. With this, we were chosen as one of the 100 startups in Asia for the Echelon e27 Summit. During this time, we were already slowly developing the product. I was talking to different possible partners and was building alliances. EJ was developing algorithm, framework and the other stuff that we had to have before developing the software.
The next chapter of our story started when we were chosen as top 25 for the Ideaspace incubation program. We got some funds to build the prototype. With the money, we hired a freelance developer who would build the working prototype for us (A big shout out to Barry! Thank you! He developed our MVP and was really good, but had to let go of the project because we didn’t have enough funds to pay him.). This is the typical challenge of a startup. If you’re going through a financial turmoil, this is normal. We were bootstrapping as bootstrapping can be. Then, we were chosen as one of the top 10 startups for the Ideaspace Acceleration program. This came in at the right time. We used the funds to speed up development. A competent team is helping us develop the new system now (shoutout to Spectres Solutions! Wooohoo!)
During this time also, we invited people to be co-founders with us. Why and how did we decide on that? Well, we knew that we needed competent people to join our team to handle different aspects of the business. We knew that we needed an accounting and taxation expert, so we invited Mark. We knew that we needed to be covered legally, so we invited Atty. Kevin. And finally, after a few months of personally handling operations and marketing, the four of us decided to invite Evan, a marketing and advertising expert, and a freelancing advocate. So that’s how our team came to be.
Today is a really important day for us — it’s Ideaspace’s Demo Day. This is where we show the world the months of hard work that we have put into our startup (thanks Charz Medoza for the great design work, our new logo and the new UI/UX that everyone should watch out for!) But forget about us, because this is the time when we share the benefits of Taxumo for all of the Philippine self employed individuals — small businesses, freelancers and professionals. You can now concentrate on starting and building your business. This is the time to REFOCUS on what matters. Refocus on your passion!
We know that the reason that you started this business is that you want to make a difference. You long for time to use words or photographs to tell a story. You wanted to see the smiles as your customers run their fingers on that dress that you so painstakingly created. Hearing the conversations of people after a workshop session that they are now inspired to take action makes your heart skip a beat. Seeing an email of gratitude from a US client for great VA work done makes you feel that you can conquer the world. Giving business or life coaching advice to hundreds of people on stage or even through a one on one session makes you elated. All of these things make you remember that it was passion and a sense of purpose that made you decide to start your own business or pursue this profession. This is how we feel. This is how we all should feel about our business.
So join the tribe and worry less about taxes! Pursue your passion. Leave all the taxation worries and sign up for Taxumo (http://taxumo.com). It’s should all be about YOU this 2017!
P.S. Thank you to all of our mentors (Ms. Diane, Sir Manny, Prim, Phil, Gabe, Paul, Edmond, Jojy, Jojo, Jay) and to all of those who helped us make this happen! We love you all! #TeamTaxumo
I was always busy and worried at certain times of the month, and it was always because of tax preparation. I have already paid a cumulative amount of probably Php 20,000 worth of penalties. My previous freelance accountants would forget to pay (because of the multitude of clients that they had to service). I, personally, would forget deadlines, because of my busy schedule. For some forms, I didn’t get to file because I didn’t know that I needed to file them. I do love math, but I really don’t get how taxes are computed.
My husband wanted to help me. He would see me suffer and he saw that the stress was killing me. Being the programmer that he is, he found a rudimentary way to automate the tax preparation that I did from home. From there, we saw the benefits of the automated process. We then wanted to share this with other business owners, freelancers and professionals.
Paying taxes should be something we do and we should see as our duty. We should do it because it will greatly help our country. We will do our share by making it simple and easy for each and every one of you. This is the reason why we created Taxumo. Taxumo is a do-it-yourself web application that computes, fills out forms and send the data directly to the bank/BIR. You don’t need to start loving math! haha! You don’t need to line up at the bank or the RDOs.
What makes our team the best people to talk to is that we genuinely understand the pain that you are going through, because we have been there. We know that BIR has been trying to come up with a way to have a robust online tax preparation process and to automate collections. We are here to help both the end users and the Bureau of Internal Revenue.
Taxumo is a web application that helps in online tax preparation and filing — so we take care of computing, filling out the forms and submitting it to the BIR/Bank.
Although, right now, we don’t handle payments that needed to be paid in the past. What you could do is to use this online tax preparation application for your payments moving forward. Right now, we cater to percentage or non-vat payers. By December, we will also be ready to cater to VAT taxpayers. If you don’t understand these terms and if you want to know if you are a vat or a percentage/non-vat taxpayer, you can check out your certificate of registration of Form 2303. Here is a sample:
All of the information you need to complete your profile page is in this document. If you lose it, you can visit your Revenue District Office or RDO (usually in the area where your business address is) of the BIR to secure a copy.
I also created this video so that you have a guide on how to use Taxumo.
The next deadline is on December 20 for Percentage Tax payers! 🙂 I hope you can sign up now while the system is FREE. Just go to http://taxumo.com and see how easy paying taxes can be!
If you have questions, feel free to write it on the comment section below!