How to File Income Tax Return (ITR)
Filing your Income Tax Return (ITR) is a legal obligation for all taxpayers in the Philippines. This comprehensive guide will help you understand the process, requirements, and deadlines for filing your ITR.
🎯 Who Must File ITR?
- Employees earning more than ₱250,000 per year
- Self-employed individuals and professionals
- Business owners (sole proprietors, partnerships, corporations)
- Mixed income earners (employed + business/professional income)
- Anyone with taxable income from any source
⚠️ Important Deadlines
Annual ITR: April 15 of the following year (for calendar year taxpayers)
Quarterly ITR: Within 60 days after the end of each quarter
Late Filing Penalty: 25% surcharge + 20% interest per year + ₱1,000 compromise penalty
Types of Income Tax Returns
| BIR Form | Taxpayer Type | Filing Period |
|---|---|---|
| 1700 | Employees (annual) | April 15 |
| 1701 | Self-employed/Professionals/Mixed income (annual) | April 15 |
| 1701Q | Self-employed/Professionals (quarterly) | Every quarter |
| 1702 | Corporations/Partnerships (annual) | April 15 / 15th of 4th month |
| 1702Q | Corporations/Partnerships (quarterly) | Every quarter |
Method 1: Filing ITR for Employees (BIR Form 1700)
Good News for Employees!
If you're an employee with only one employer and your employer withheld the correct taxes throughout the year, you may be EXEMPT from filing an annual ITR. However, it's still recommended to file to claim tax refunds if applicable.
Who must file BIR Form 1700?
- ✓ Employees with income over ₱250,000/year
- ✓ Employees with two or more employers
- ✓ Employees who want to claim tax refund
- ✓ Employees with other sources of income
Step-by-Step ITR Filing for Employees
Get BIR Form 2316 from Your Employer
- •Certificate of Compensation Payment/Tax Withheld
- •Your employer provides this by January 31
- •Shows your annual salary and taxes withheld
Download and Fill Out BIR Form 1700
- •Get form from bir.gov.ph
- •Or use eBIRForms software
- •Fill in personal information and income details
Prepare Required Documents
- •BIR Form 1700 (filled out)
- •BIR Form 2316 (from employer)
- •Valid ID
- •Proof of tax payment (if with tax due)
File Your ITR
- •Option A: Manual filing at RDO
- •Option B: Online filing via eBIRForms + eFPS
Pay Tax Due (if applicable)
- •Pay at authorized agent banks
- •Or pay online via eFPS
- •Attach payment confirmation to ITR
Filing Deadline
April 15 (following the calendar year)
Filing Fee
FREE
Only tax due if applicable
Method 2: Filing ITR for Self-Employed/Professionals (BIR Forms 1701/1701Q)
Self-employed individuals and professionals must file both quarterly (Form 1701Q) and annual (Form 1701) income tax returns.
Quarterly ITR (BIR Form 1701Q)
Filing Deadlines
| Quarter | Period Covered | Deadline |
|---|---|---|
| 1st Quarter | January 1 - March 31 | May 15 |
| 2nd Quarter | April 1 - June 30 | August 15 |
| 3rd Quarter | July 1 - September 30 | November 15 |
| 4th Quarter | October 1 - December 31 | Included in Annual ITR (April 15) |
Steps to File Quarterly ITR
Calculate Quarterly Income
- •Total gross receipts/sales for the quarter
- •Less: Business expenses (if applicable)
- •Equals: Net taxable income
Compute Tax Due
- •Apply graduated income tax rates OR
- •Use 8% flat rate (for gross sales/receipts)
- •Less: Creditable withholding taxes
- •Equals: Tax payable
Fill Out BIR Form 1701Q
- •Available at bir.gov.ph or use eBIRForms
- •Enter income, expenses, and tax computation
- •Double-check all computations
Pay Tax Due
- •Generate Payment Form (0605)
- •Pay at authorized agent banks
- •Or pay online via eFPS
File ITR at RDO or Online
- •Submit within 60 days after quarter end
- •Attach payment confirmation
- •Keep stamped copy for records
Annual ITR (BIR Form 1701)
Steps to File Annual ITR
Gather Financial Records
- •Summary of all income (entire year)
- •Summary of all deductible expenses
- •Quarterly ITR returns (1701Q)
- •BIR Form 2307 (if applicable - creditable withholding)
- •Supporting documents (receipts, invoices)
Compute Annual Income Tax
- •Total gross income for the year
- •Less: Allowable deductions
- •- Business expenses
- •- Personal exemptions (if graduated tax)
- •Net taxable income
- •Apply tax rates (graduated OR 8% flat)
Reconcile Quarterly Payments
- •Total tax due for the year
- •Less: Quarterly taxes paid (from 1701Q)
- •Less: Creditable withholding taxes
- •Equals: Tax still due OR Tax refund
Fill Out BIR Form 1701
- •Download from bir.gov.ph or use eBIRForms
- •Complete all schedules (income, expenses, tax)
- •Attach all supporting documents
File and Pay
- •File on or before April 15
- •Pay any remaining tax due
- •Or claim refund/credit if overpaid
Required Attachments
- ✓ Audited Financial Statements (if gross sales/receipts exceed threshold)
- ✓ BIR Form 2307 (creditable withholding tax certificates)
- ✓ Quarterly ITR copies (1701Q)
- ✓ Supporting schedules
Income Tax Computation
Self-employed individuals and professionals can choose between two tax computation methods:
Option 1: Graduated Income Tax Rates
Apply the following tax rates to your net taxable income:
| ₱250,000 and below | 0% |
| Above ₱250,000 to ₱400,000 | 15% |
| Above ₱400,000 to ₱800,000 | 20% |
| Above ₱800,000 to ₱2,000,000 | 25% |
| Above ₱2,000,000 to ₱8,000,000 | 30% |
| Above ₱8,000,000 | 35% |
Option 2: 8% Flat Rate
Simpler computation based on gross sales/receipts:
8% of Gross Sales/Receipts
(In lieu of graduated tax and percentage tax)
Advantages:
- No need to itemize deductions
- Simpler bookkeeping
- Lower tax for high-profit businesses
💡 Tip: The 8% option is irrevocable for 3 years. Compute both methods before choosing to see which gives you lower tax. Consult a tax professional for complex situations.
Filing Methods
Method A: Manual Filing at RDO
- Download and print BIR forms from bir.gov.ph
- Fill out forms manually or using eBIRForms software
- Prepare 3 copies of each form
- Pay tax due at authorized agent banks (if applicable)
- Submit ITR with payment confirmation at your RDO
- Receive stamped copy as proof of filing
Processing Time: Same day • Cost: FREE (only tax due)
Method B: Electronic Filing via eFPS
- Register for eFPS (Electronic Filing and Payment System) at your RDO
- Download eBIRForms software from bir.gov.ph
- Fill out forms electronically using eBIRForms
- Submit forms online through eFPS portal
- Pay tax due online via eFPS (debit from enrolled bank account)
- Receive email confirmation and Transaction Reference Number (TRN)
Processing Time: Instant • Cost: FREE (only tax due)
✓ Recommended: eFPS is faster, more convenient, and you don't need to visit the RDO. You can file 24/7 from home or office.
Complete Example: Freelancer Filing Quarterly ITR
Scenario: Ana Lopez, freelance writer (self-employed)
Quarter: 1st Quarter (January - March 2026)
Income for the Quarter:
- Client A: ₱50,000
- Client B: ₱35,000
- Client C: ₱28,000
- Total Gross Income: ₱113,000
Expenses (for Graduated Tax):
- Internet/Software: ₱3,500
- Electricity: ₱2,000
- Office Supplies: ₱1,500
- Total Expenses: ₱7,000
Option 1: Graduated Rates
- Net Income (Q1): ₱106,000
- Annualized: ₱424,000
- Tax Rate: 15%
- Quarterly Tax: ₱15,900
Option 2: 8% Flat Rate
- Gross Income: ₱113,000
- Tax Rate: 8%
- Tax Due: ₱9,040
Ana chooses: 8% option (lower tax) - Tax Due: ₱9,040
Steps Ana Took to File Her Quarterly ITR
Downloaded eBIRForms Software
- •Visit the official BIR website
- •Download the latest eBIRForms software
Filled Out BIR Form 1701Q
- •Entered her income details
- •Selected 8% flat rate option
- •Computed tax due (₱9,040)
Logged Into eFPS Portal
- •Accessed the BIR eFPS system
- •Authenticated with her TIN and credentials
Uploaded Form and Submitted Electronically
- •Uploaded the completed 1701Q form
- •Submitted the return electronically
Paid Tax Due Online
- •Paid ₱9,040 via online debit
- •Received payment confirmation
Received Confirmation Email
- •Filed on May 10, 2026
- •Received official filing confirmation from BIR
Printed Confirmation for Records
- •Saved electronic copy of confirmation
- •Printed physical copy for backup records
Time Spent
45 minutes
(at home)
Total Cost
₱9,040
(tax due)
Allowable Deductions (Graduated Tax)
If you choose the graduated income tax option, you can deduct these expenses from your gross income:
Business Expenses
- Office rent
- Utilities (electricity, water, internet)
- Office supplies and materials
- Professional fees paid to others
- Depreciation of equipment
- Business-related transportation
- Advertising and marketing
Personal Exemptions
- Basic personal exemption: ₱50,000
- Additional exemption per dependent: ₱25,000 (max 4)
- Premium payments on health/hospitalization insurance
Note: Personal exemptions are already included in the tax table computation
⚠️ Important: All deductions must be supported by Official Receipts or valid documents. Keep them for at least 3 years in case of BIR audit.
Penalties for Late or Non-Filing
| Violation | Penalty |
|---|---|
| Late filing of ITR | 25% surcharge on tax due + 20% interest per annum |
| Non-filing of ITR | 25% surcharge + 20% interest + ₱1,000 compromise penalty |
| Late payment of tax | 25% surcharge + 20% interest per annum (from due date until full payment) |
| Filing false/fraudulent return | 50% surcharge + criminal prosecution + imprisonment |
Example: If you owe ₱10,000 and file 6 months late, your penalty is ₱2,500 (25% surcharge) + ₱1,000 (interest for 6 months) + ₱1,000 (compromise penalty) = ₱4,500 penalty on top of the ₱10,000 tax!
Frequently Asked Questions
Do I need to file ITR if I'm just an employee with one employer?
Generally, NO - employees with only one employer who withheld the correct taxes are exempt from filing annual ITR. However, you must file if: (1) You have income from other sources, (2) You have two or more employers, or (3) You want to claim a tax refund.
What happens if I miss the April 15 deadline?
You can still file a late ITR, but you'll be subject to penalties: 25% surcharge on the tax due, 20% interest per year, and a ₱1,000 compromise penalty. File as soon as possible to minimize penalties.
Can I file ITR online?
Yes! Register for eFPS (Electronic Filing and Payment System) at your RDO. Once registered, you can file and pay your taxes online 24/7 using the eBIRForms software and eFPS portal. It's faster and more convenient than manual filing.
Should I choose graduated tax or 8% flat rate?
It depends on your profit margin. The 8% option is better if you have high profit margins (low expenses). Compute both ways to see which gives lower tax. Remember: the 8% option is irrevocable for 3 years. Consult a tax professional for personalized advice.
What if I have no income for the quarter?
You must still file a "zero" or "nil" ITR indicating no income for that period. This keeps your tax record active and avoids penalties for non-filing.
Do I need an accountant to file my ITR?
Not required for simple tax situations. Many taxpayers successfully file their own ITR using eBIRForms. However, if you have complex income sources, large business operations, or need audited financial statements, hiring a CPA is recommended.
How do I claim a tax refund if I overpaid?
File your annual ITR showing the overpayment. You can either: (1) Request a refund by filing BIR Form 1914, or (2) Carry over the excess as tax credit for next year. Refunds can take 6-12 months, so most taxpayers choose the tax credit option.
What is BIR Form 2316 and why do I need it?
BIR Form 2316 is the Certificate of Compensation Payment and Tax Withheld issued by your employer. It shows your total salary and the taxes withheld. You need it to file your ITR as an employee. Employers must provide this by January 31.
Important Reminders
- Mark your calendar: Set reminders for quarterly (May 15, Aug 15, Nov 15) and annual (April 15) deadlines
- Keep good records: Maintain organized records of income and expenses throughout the year
- Use eFPS: Online filing is faster, more convenient, and you get instant confirmation
- File even with zero income: Always file your ITR even if you have no income for the period
- Get receipts: Always ask for Official Receipts for business expenses - needed for deductions
- Don't wait until the last day: File early to avoid system overload and last-minute stress
- Keep copies: Save copies of all ITR filings and payment confirmations for at least 3 years
Need Help?
Contact BIR
- BIR Hotline: (02) 8538-3200
- BIR Contact Center: 8538-3200 local 6000
- Email: contact_us@bir.gov.ph
- Website: www.bir.gov.ph
- eFPS Help: efps@bir.gov.ph
Disclaimer
This guide is provided for general informational purposes only. The requirements, steps, fees, and procedures mentioned here may vary depending on the BIR you visit. We recommend visiting your nearest BIR first to confirm the specific requirements and process before preparing your documents.