Think about all the attention given to the following:

  • Decluttering your closet and keeping and displaying things that bring you joy…
  • Following the footsteps of Bill Gates, Mark Zuckerberg when they only have one style of shirt or attire…
  • The rise of planners and productivity apps that help you with time management.

All of these “hacks” introduced to us because man has finally realised that TIME is the most important asset.

And this realisation is what makes most entrepreneurs, freelancers and business owners successful. They never WASTE time. It’s more important than money. This is why service apps like GRAB, and even Upwork thrive, because successful people know that money is something that you can earn back but when you lost time, it’s lost forever.

This is the reason why Taxumo exists as well. If you value your time, and if you’d much rather spend your time earning money than computing your taxes or lining up at the RDO or the bank, this application is for you. We exist for people who see that they would much rather outsource computing, filing and paying to a system or application than spending time figuring out how to file and pay or when to file and to pay. It’s basically Taxumo giving you that gray sweater of Bill Gates and all you need to do is to wear it 🙂 haha! 

To make it even more convenient for you, freelancer or consultant, I have made this step by step guide on how to start using Taxumo and how to maximise using Taxumo.

SETTING UP A TAXUMO ACCOUNT FOR FREELANCERS OR CONSULTANTS

Sign up to Taxumo using these settings (Yup, just copy your Certificate of Registration). Here is a sample Certificate of Registration and see the parts. It contains the Tax Type that you need to file.

If you don’t have this, check out Taxumo’s Business Registration Service for Freelancers. Click here: https://www.taxumo.com/business-registration/freelancer

Have your COR by your side when you set up your Taxumo account. If you don’t have it while setting up, it’s okay. You can still change the details later on. Copy EXACTLY what is written in your COR. Example, if the Taxpayer’s Name in your COR is Arboleda, Ginger Palma, please copy it as is in Taxumo.

As you can see, you can turn the notifications (email notifications) on and off. We highly suggest that you turn these on.

For your Business Profile (see image above), just copy the line of business in your COR. For “I want to file my Taxes From”, place the date when you received your Certificate of Registration OR place the date when you want to start filing with Taxumo (if you’v been filing taxes manually before).

For Freelancers / Consultants who earn below Php 3 Million Gross Revenue or Gross Sales a year, the above settings are the suggested settings. Just copy it.

Business Type: You are providing services

Income Source: Income from Profession BUT if you are still employed AND doing consultancy / freelance work on the side, choose “Mixed from Business and Employment”.

Income Tax Rate Type: If you earn below Php 3 Million Gross Revenue or Gross Sales a year and have minimal business expenses, we suggest that you choose the 8% Flat income tax rate option.

TaxPayer’s Type: Choose Professional

Deduction Method: Just choose Optional Standard Deduction but this won’t matter when the system computes your income tax since you chose 8%.

For each year also, Taxumo allows you to save a business setting! 🙂 So cool! Since you can only change Deduction methods and income tax rate types at the beginning of the year, you can choose and save settings for each year.

And for the last part of the settings page, choose and highlight (color aqua) the taxes that you need to pay. Again, based this on your Certificate of Registration. Then upload your COR and your Digital Signature (which is both optional at this point).

ENCODING INCOME AND EXPENSES AS A FREELANCER OR CONSULTANT

The next step is to encode your income and expenses. Click on Cashflow on the left side of the screen, and this is what you’ll see (empty cashflow tab). You can look for entries that you have encoded before by clicking on show filter. To add income, click on the “Add Button”.

This is how an empty Cashflow view looks like.

Each income entered in Taxumo should match an official receipt that you prepared for your client. The OR/SI number portion is the OR number of that transaction. For freelancers/consultants, always choose Sales – Services.

Business Name here is the name of your client. For foreign clients who don’t care about ORs, you don’t need to send them a copy of the official receipt. Just keep it in your booklet.

For expenses, those expenses that you can justify to be part of the delivery of your services is what you can encode. Please make sure that the receipts are under your Tax Payer’s Name (especially for expenses that are Php 1000 and above in amount). For transportation and foreign system invoices, please save emails as PDF and save it in your computer. You can also upload it to Taxumo as backup.

PRO TIP: Encode both income and expenses on a daily basis. This will allow you to maximize Taxumo’s Real Time Tax Calculation tool. You can see how much taxes you need to pay at any given time (para hindi kayo nabibigla when tax due dates come).

FILING TAXES

To file taxes, be sure that you are done encoding your income and expenses for the applicable period. Go to the Tax Dues tab and you’ll see all the tax cards with the Tax Dues and the deadlines.

Click on the file button and pay your taxes. Taxumo will then show you a summary of that tax.

If there are things that you need to change, you can go to your settings page. Some fields are also editable here.

For paying your taxes, you need not go to a bank within the city of your revenue district office. You can pay using any of these available channels.

  • Grabpay
  • Debit or Credit Card
  • PayPal
  • Mobile or Online Banking
  • Bank over the counter or Non-Bank over the counter like Bayad Center, SM Payment Counters, Robinsons, 7-11, etc.

PRO TIP: If you have chosen Dragonpay, please ALWAYS check your email for the completion of payment. They will send instructions for you to complete your payment.

Once you have successfully filed and paid for your taxes, you can visit the Past Filings tab on your Tax Dues tab.

If you see “Unpaid filings”, these are the tax cards that you have clicked but have not yet paid for. All you need to do is to click on CANCEL FILING so that the tax card returns to the CURRENT FILINGS TAB.

If you have successfully files and paid for a tax card, it will be marked COMPLETED (it will be marked temporarily IN PROGRESS for 2-3 days before it will say COMPLETED). Once marked completed, you can download and save the copy of the (1) form (click on view form and then click print form — print to PDF if you want to save it in your computer), (2) Download the BIR Confirmation and (3) Download and save the tax payment record.

It’s important to save backups of these in your computer. An OC person like me always want to have “back-ups” for everything. 🙂

After this, you can sit back and relax!!! Fun times!

If you want to maximize your Taxumo subscription, here are some things that you may not know about Tauxmo…

  1. If you receive 2307 forms, you can encode them directly to Taxumo’s Withheld Taxes tab (received tab) and the system will consider it when it computes your Income Tax return. Some people don’t know that these “attachments” should also be submitted and declared to BIR using another system called Alphalist Data Entry and Validation Module. Failure to submit these will also incur penalties.
  2. For your manual books of accounts, you will need to update them frequently. When a BIR examiner visits you, s/he will check if your books are updated. If you don’t know how to update your books, worry no more as Taxumo’s Books of Accounts view formats your entries in columns and all you need to do is copy these entries to your manual books.
  3. If you need to pay SSS voluntary contributions or loan payments, you can click on Pay bills. Compared to other systems, Taxumo already generates the PRN or the payment reference number for you which you can get also from the SSS site. You need not shift from one site to the other.
  4. Entries are exportable and downloadable via Taxumo’s Books of Accounts view. All income is under cash receipt and all expenses are under cash disbursements.
  5. You can give access or delegate access to two more people. Example, if you are using an accountant or bookkeeper, you can give one access to him or her.

Rest assured that Taxumo is constantly innovating and looking for ways that can help you become more productive as a freelancer or consultant.

For Taxumo’s pricing for their subscription plans, click on this link: https://www.taxumo.com/taxumo-pricing/

For those who copied the 8% option above, pricing is at Php 888 per month or at Php 10,000 for a year’s access.

For those with a lot of expenses and who would like to opt for the Graduated Income Tax Table — OSD or Itemized Deduction, pricing is at Php 1888 per month or at Php 20,000 for a year’s access.

If you have any more questions on how to use Taxumo, feel free to leave a comment or message me through https://www.facebook.com/mommyginger/.

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 customercare@taxumo.com!

Hear ye, hear ye! Taxumo has a new and improved dashboard that offers so much more than just tax filing. It now has some form of analytics (cool charts and all!) that shows you your income and expenses and what your top expenses are as a business.

The Dashboard

For long time users, you may be surprised to see that the first thing you see is the dashboard and not the “CASHFLOW” tab. If you want to ADD an Income or an Expense Entry, feel free to click on the Cashflow tab on the left side or one of the Cards in the Dashboard.

Settings Tab

We changed how we called the tab for setting up your account from “COMPANY” to “SETTINGS”. When you first created your Taxumo account, this is what you were filling out. Feel free to visit this page again as we have simplified the fields the best way we can. We have some guides that you can click on; those are the little question marks seen at the side of each field.

Tax Dues Tab

Tax dues are now in the tax due tab and are grouped per tax type. We also have a reminder on actionable steps that you need to take. For late filings, we have also highlighted them just in case you have missed them.

If you want to view your past filings, click on the Past Filings tab. If you accidentally marked a tax card as paid, you can go to the Hidden Filings tab and unhide it.

Payment Channels

We have fixed our payment checkout page. We have heard your requests for us to add more payment channels! We are proud to say that in the coming months, you will see more and more payment options — options that will make it easier for you to file and pay your taxes anytime, anywhere!

#TeamTaxumo is honored to partner with GrabPay! When you file and pay via GrabPay Credits starting July 1, 2019 (until August 31, 2019), you will get a Php 100 off on Taxumo’s processing fees.

Xennies! Get or Earn Taxumo Credits!

We have introduced Xennies! Xennies are Taxumo’s Credits that can be used to pay for your Taxumo Processing fees. There are two ways to get hold of Xennies.

One is to share your own referral code to your friends and family. To set your referral code, click on your name at the top portion of Taxumo’s screen. Click “My Account” and it will direct you to your Xennies Transaction History page. You can earn 100 Xennies for every friend or family that successfully files a form via Taxumo.

Another way to get Xennies is to purchase Xenny Packs. These are available for sale inside the Taxumo Platform. 1 Xenny = 1 Peso. We have a promo running now with GrabPay. Get 10% to 100+% credits when you purchase using GrabPay.

So there you have it folks! These are the changes in the system. If you have any other suggestions, feel free to email customercare@taxumo.com 🙂

Here is a video that you can watch!

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

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.

BIR Forms

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.

Documents Needed

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!

Payments

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.

Key Takeaway

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!