Tuesday, April 5, 2016

Filing Annual Income Tax Returns for the First Time

Since I started working x years ago, I've never had to worry about filing income taxes. My employers would always take care of it for me. The only thing left to do was to complain at how much my hard-earned money goes into our politicians' pockets.

This year's different. 

I left the corporate world a few months ago so I'm basically on my own when it comes to filing my annual income tax returns for 2015. April 15 is only days away and I've been told that that's the last day for filing. 

This is the first time I'm doing it and honestly, it scares the crap out of me. I don't know anything!

As of writing, I'm in the last step, which is submitting hard copies and paying my tax debt to the government--or whatever you call it. (I owe the government?!)

Here are some of the things I did and learned in the process:

1. Hire an accountant. 
Instead of dreading the thought of doing this on my own, I took the easy way out. I set an appointment and in less than half an hour, the accountant was done! She computed how much tax was withheld already and how much I still owed the government. She also submitted the form online and prepared all the necessary documents for submission to the bank. 

2. Request for BIR form 2307 from all companies you've received income from. 
In preparation for my appointment with the accountant, I was told to request for these forms. This is because I had more than one source of income in 2015. This document stated earnings from the company, which the accountant would base computations on. I also showed her my BIR form 2316 (Certificate of Compensation Payment/Tax Withheld) from my latest employer.

3. Be honest...
In this case, with my income. I was hesitant to show the accountant all my figures (even if the amount isn't big)... just because. It's like that feeling of needing to show the doctor your privates. Haha!  Different people would have different opinions on this but for me, I chose to be honest to avoid unnecessary penalties from BIR in the future. 

4. Ignorance of the law excuses no one. 
You can't just say, "Oh, I didn't know!" Income taxes really need to be filed diligently based on one's cumulative income. Otherwise, there's the risk of great penalties. All forms of income must be declared, including commissions from multi-level marketing (MLM) companies. Who knew?!

5. After all taxes withheld, you can still owe the government money!
Shocking, I know. After the accountant computed (and after much explaining, which I still have to internalize), I still owe the government tax money! Nakakapanghina talaga

As a first timer to all this, and seeing how the accountant did it, I can't imagine myself filing my own taxes correctly. Hiring an accountant made the process way easier. I guess I'll see her again next year!

In the meantime, can I complain about how much of my hard-earned money goes into our politicians' pockets?!?

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