If you have mixed earnings or a side gig on top of your regular job, you might be wondering how you should file your taxes to bir gov ph.
Mixed income earners are simply those who receive income from several sources. This includes your employee salary, business earnings, or gross receipts from being a freelancer.
Under the new tax reform or TRAIN, mixed-income earners are subjected to these taxes:
All Income from Compensation
Your income as a salaried employee will be taxed according to the BIR Income Tax Table.
All Income from Business or Practice of Profession
Your earnings as an entrepreneur or freelancer will be taxed under the tax rate for self-employed and professionals.
This means that if you’re earning less than P250,000 annually, you are exempt from paying percentage tax and income tax. In short, you don’t have to file any tax returns.
On the other hand, if your earnings exceed P250,000, then you must settle your percentage tax and income tax.
Also, when your annual gross sales or receipts do not exceed the VAT threshold of P3 million, you have two options for filing your taxes. You can file for 8% of your gross sales/receipts, or the graduated personal income tax rates of 0% to 35% on net taxable income. The choice is totally up to you, but if you’re wondering which option is better, you can use our calculator.
Meanwhile, if your annual gross sales or receipts exceed the VAT threshold, you will have to file your taxes using the graduated income tax tables. You don’t have the option to choose the 8% rate.
All these new TRAIN regulations can be overwhelming, especially if you’re running a business while having a regular job. You already have so much on your plate, and taxes can add to your stress and even prevent you from focusing on things that matter most, like brainstorming with your team or spending time with your loved ones.
Luckily, there’s an online tool like Taxumo that can do the hard work for you. Just input your income and your expenses, and it will do the rest. Filing and paying your taxes has never been this hassle-free.