4 Best Tips on Managing Your Taxes

July 21, 2020

4 Best Tips on Managing Your Taxes

What tax management tips should you know about?

  1. Be aware of government advisories
  2. Ensure you have the proper documents
  3. Issue official receipts
  4. Hire a bookkeeper

Taxes are probably one of the most complicated aspects of anyone who is earning compensation. Whether you’re managing a small business or simply an employee receiving a monthly income, you need to be aware of the proper tax management tips as part of regulatory compliance.

Paying taxes in the Philippines can be a cumbersome task, especially if you don’t know where to begin. If you’re confused, then this article aims to guide you throughout the way. Continue reading to learn more.

Be aware of government advisories

There have already been convenient methods of filing your income tax returns in the Philippines. In particular, e-filing systems have already been introduced by the country’s leading tax governing body, known as the Bureau of Internal Revenue. Keeping this in mind, a simple way of staying updated with anything regarding tax-related matters is through keeping abreast of government advisories.

You don’t even need to manually visit a revenue office in this endeavor since this government body has already ensured that they make their website available. On this website, every change that you need to know will have already been communicated with the public. Take advantage of this accessibility by visiting the website from time to time for memorandum circulars for your perusal.

Ensure you have the proper documents

Ensure you have the proper documents

Another effective way for you to properly manage your taxes is to ensure that you have the correct documents and information at hand. As you may have already figured out, filing your income tax returns requires a lot more papers. Here’s what you need to know.

The ITR filing system in the country involves a total of six Annual ITR forms. Each form has a specific purpose and designation, depending on your status as a taxpayer in the Philippines. To give an example, the BIR Form No. 1700 applies to those who are being compensated through an employer-employee arrangement. In addition, another form is in place for the self-employed, known as Form No. 1701 also entitled “Annual Income Tax Return for Self-Employed, Individuals, Estates and Trusts”.

Whatever your status is, make sure you’re filling out the proper information and document when you’re already engaged in the filing process.

Issue official receipts

The issuance of official receipts is more applicable to business owners who are involved in the sale or the purchasing of products and services. This is not only one of the easiest ways of legally reducing the taxes imposed on your business, but it also ensures integrity in the sale of merchandise or service.

There is such a term as “allowable deductible expenses” and may come in a variety of forms such as advertising and promotions, director’s fees, charitable donations, some utilities, and more. It’s a good way to have each of these expenses supplanted with an Official Receipt to be able to qualify for tax deductions. It’s an important tip to remember that in order to lower the amount of tax you need to pay, you have to have a low taxable income as well.

Hire a bookkeeper

Hire a bookkeeper

Still not sure on how to go about managing your taxes? Maybe it’s time that you enlist the services of a professional bookkeeper. On the off chance that you don’t completely trust yourself with keeping aware of all tax-related information that you need to understand, a bookkeeper can make this more smooth-sailing for you.

With a bookkeeper, you’ll be able to more easily manage your daily finances and expenses. They’ve been specifically trained to interpret information derived from your accounts, bills, invoices, and the like. More than that, they perform the primary financial administrative tasks required of them. You no longer have to worry about such cases as tax evasion, or failure to file your ITRs.

Key Takeaway

Sometimes, the best tax management tips can only be figured out by you, as long as you help yourself. There are many available online resources that you can learn from regarding revenue offices to file at, what kind of forms you need to secure, or even how much tax you need to declare.

The article above will hopefully guide you on the right path to proper tax management, whether you’re a self-employed individual, freelancer, business owner, or a company employee.