How to File BIR Form 1701Q : A Step-by-step Guide for Self-Employed Individuals and Sole Proprietors

One of your major responsibilities as a freelancer or sole proprietor is filing your BIR Form 1701Q. This form is also known as the Quarterly Income Tax Return For Individuals, Estates and Trusts. This is submitted quarterly for the first, second, and third quarters.

Who are required to file BIR Form 1701Q

According to BIR’s guidelines, this must be accomplished and filed in triplicate by the following individuals:

  1. A resident citizen engaged in trade, business, or practice of profession within and without the Philippines.
  2. A resident alien, non-resident citizen, or non-resident alien individual engaged in trade, business, or practice of profession within the Philippines.
  3. A trustee of a trust, guardian of a minor, executor/administrator of an estate, or any person acting in any fiduciary capacity for any person, where such trust, estate, minor, or person is engaged in trade or business.

In summary, you will need to file Form 1701Q if you’re a professional (e.g. freelancer, doctor), a self-employed individual in a sole proprietorship, or a trustee.

I’m earning less than ₱250,000 annually

Under the new TRAIN law, those who earn less than ₱250,000 annually are exempt from paying income tax returns.  So if you fall under this bracket, you don’t have to pay your quarterly ITR — BUT you still have to file.

Having said that, we do recommend that you still file your Quarterly ITRs and consistently comply. As we said previously in an earlier article, imagine needing to have an ITR and then having to explain how tax exemptions work to whoever you’re talking to. Yeah, good luck.

Check out the new Income Tax Table under TRAIN. Take note that the rates will go lower in 2023.

My annual income is more than ₱250,000

The TRAIN law gives you two options for filing and computing your taxes. You can either follow the 3% percentage + income tax (use the graduated income tax table) or use the new 8% Gross Receipt Tax.

Now, the 8% Gross Receipt Tax might sound easier for you, but keep in mind that it’s not for everyone. To know if you’re making the right choice, check out this tax calculator that we made for you.

How to compute your Quarterly Income Tax dues

Before you begin, you’ll need to check whether you’re on the 8% Income Tax Rate or the Graduated Income Tax Rate. The easiest way to do this is to check your Certificate of Registration from the BIR. This will indicate which tax schedule you’re on.

I’m on the 8% Income Tax Rate

The first thing you’ll need to know is whether your earnings come solely from your business or profession, or if your earnings come from both compensation (basically, if you have an employer) and business/profession.  After which, you can apply the formula below applicable to you:

Income Solely from Business / Profession

Total Income Tax Due = 0.08 * (Gross Sales - ₱250,000)

Mixed Income Earner

Total Income Tax Due = (0.08 * Gross Sales) + Tax Due on Compensation

As you can see, the ₱250,000 deduction is NOT applied for Mixed Income Earners. The reason for this is because the ₱250,000 has already been deducted from the tax due based on compensation so it no longer applies to the tax from your business.

I’m on the Graduated Income Tax Rate

If you’re on the Graduated Income Tax Rate, you’ll need to check first whether you’re on Itemized Deduction or Optional Standard Deduction (OSD).

Here’s the difference between the two if you’re confused:

  • OSD – This allows you to claim a deduction of 40% from your gross sales or receipts for the quarter.
  • Itemized Deduction – You have to identify and deduct all the ordinary and necessary expenses from your gross income. These expenses must attribute to the development, management, and operation of your business like travel and salaries.

Take note that neither of these options is available for you if you opt for the 8% IT rate

Now, both of the deductions have different formulas for computing your taxable income so check your Certificate of Registration to confirm which one applies to you.

With that being said, calculating your tax payable for Graduated Income Tax Rate takes two steps:

  1. Compute your taxable income
  2. And, based on the taxable income, refer to the tax table for how much tax you’ll need to pay

Formulas for Taxable Income

Itemized Deduction
Taxable Income = Gross Sales - Gross Purchases
Optional Standard Deduction
Taxable Income = Gross Sales * 60%

Computing for Tax Payable

After calculating your taxable income, you will need to refer to the tax table below for your tax dues.

train tax table

Deadlines for filing BIR Form 1701Q

PeriodDeadline
Quarter 1: January to MarchOn or before May 15
Quarter 2: April to JuneOn or before August 15
Quarter 3: July to SeptemberOn or before November 15

Your Annual Income Tax Return will include your 4th quarterly ITR filing. That’s why there’s no Quarter 4 deadline.

Remember, the BIR doesn’t give extensions to these deadlines. Therefore, taxpayers are encouraged and expected to file as early as they can to avoid the usual inconveniences during the last day of filing.

How to fill up BIR Form 1701Q

Step 1

Fill out Part I of BIR Form 1701Q. This includes your basic information such as your TIN, registered name, registered address, the line of business or occupation, and other applicable information.

Step 2

Before filling out Part III, you will need to accomplish Part V of the form first. You will find this on page 2.

Fill in Schedule I if you’re on the Graduated IT rate

BIR Form 1701Q Part 5

Fill in Schedule II if you’re on the 8% Flat IT rate.

bir form 1701q part 5 schedule 2

Step 3

Fill out Schedule III if you have any tax credits or payments

bir form 1701q part 5 schedule 3

Step 4

Add in your Tax Payable on Line 63. Deduct your Tax Due from Schedule I or II with the Total Tax Credits/Payments from Schedule III to compute this.

Step 5

Go back to Page 1 of the form and fill out Part III (Total Tax Payable). Refer to your inputs in Part V to know what to write down in this section.

bir form 1701q part 3

Step 6

Save the form, submit, and pay if you have any tax dues.

And that’s how you fill out your quarterly income tax return!

What are the attachments required for filing

Here are the documents you’ll need to prepare:

  1. Certificate of Income Tax Withheld at Source (BIR Form 2307), if applicable.
  2. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form 2304) if applicable.
  3. Duly approved Tax Debit Memo, if applicable.
  4. Previously filed return, if an amended return is filed for the same quarter.

Where do I file my BIR Form 1701Q

First, you must file your income tax return first using eBIR Forms and print out copies of the form (with the attachments). After that, submit the forms to any Authorized Agent Bank (AAB) located within the territorial jurisdiction of your Revenue District Office. Present your accomplished BIR form 1701Q with the requirements and your payment. The teller of the AAB or the RDO officer will give you a copy of your stamped and validated form.

For “No Payment” returns, you only have to attach the required documents to your BIR form 1701Q. You will also receive a copy of your stamped and validated form.

If your place doesn’t have any AABs, you can file this directly with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO.

The easier way to file and pay your Quarterly ITR

Let’s admit it. The computations and filling up of forms can be quite tedious. The submission of attachments are a nightmare, too (since we need to input it one by one)!

Fortunately, there is Taxumo, a web-based tax filing app that lets you skip the manual computing of tax dues and accomplishing of BIR form 1701Q.  Instead, you would only need to enter your income and expenses, and you get your tax dues auto-calculated in real-time. 

The BIR form 1701Q is also auto-generated so there’s no need to manually fill out and print forms. The best part is that with a click of a button, you could submit your taxes online through the app. Taxumo also submits the attachments (2307s) for you!

You can watch our webinar on how you can file Form 1701Q online through Taxumo below:

Are there penalties for late filing

Absolutely. Apart from your tax due, you have to pay a 25% surcharge, a 20% interest per annum, and a compromise penalty. If you choose to neglect to file the return, there is a penalty of 50% of the tax due.

Refusal to pay penalties will be referred to the appropriate office for criminal action, so make sure that you pay your taxes on time.

You may also want to check out our other articles below:
Hungry for more? Visit our Taxumo blog HERE.  

28 thoughts on “How to File BIR Form 1701Q : A Step-by-step Guide for Self-Employed Individuals and Sole Proprietors”

  1. Good day! I would like to inquire. I have this property of my parents which I registered last May 2018 for rent. I fall out to 1701Q form subject to 8% option tax. Those rental units (4units) earn for a total of P 13,500.00 per month or P 162,000.00 annually. Am I still subject to 8% option tax? Should I pay the 8% tax quarterly based on my quarterly gross receipts? Thank you in advance.

    1. If you’re earning less than P3M / year then yes you could still opt for the 8% tax. At any point you exceed P3M though, you’ll have to switch to VAT + Graduated Income Tax. 🙂

  2. In filing for 1701q at 8 % of gross sales, can I deduct P62,500 from gross sales for the quarter. Such amount is equal to a quarter of the P250,000 allowable deduction for the 8% gross sales for the year. Thank you very much.

    1. Hi Federico, that’s not really how income taxes work so you won’t be able to do that. You’ll actually deduct the whole 250K every filing. Each quarter income tax filing is not just specific to the quarter before it — it shows your income/expenses for the whole year until the quarter you’re filing. So you’ll eventually reach a quarter when deducting 250K will still result in a taxable income. By that time, you’ll pay taxes na.

      I would bet though that your time is worth much more than having to struggle with having to fill out the form properly. I would highly recommend you file through Taxumo – we take care of all of the complexities for you so you can just “fire and forget” 🙂

  3. Im engaged in small trading with annual income of 195,000 php.

    i forgot to zero file my 1701q. how much is the penalty for this?

    thank you

    1. Who can help me with this. I’m about to file my 1701Q but i don’t have any sales to report for now. Do I still need to provide attachments in the ALPHALIST DATA SYSTEM AND VALIDATION MODEL? Thank you.

  4. I am a professional management consultant under the 8% IT rate. I have zero income in the January to March, 2020 quarter. I did not file the Alphalist Dat file. Should i prepare and submit the Alphalist DAT file even if I have zero income during the first quarter? I have prepared and filed the 1701Q (Validated OK) last June 8 but until today I have received the confirmation/ acknowledgement receipt.

    Thank you.
    Ben de Leon

    1. Hi Jomari. You’re already incurring penalties if you fail to file. As mentioned in the blog post above, you still need to file even if you have zero revenue. If you don’t have sales, you will simply indicate that you have zero income for the quarter.

  5. Pingback: Taxumo vs Accountants: Which One Is Best For You? | Taxumo Blog

  6. Pingback: Guide for BIR Form 2307 for Tax Computation in the Philippines | Taxumo Blog

  7. hi there… just a quick question.. hope you can clarify… in my settings, i opted to take the 8% Tax option… the thing is, i just noticed that i have been filing both the forms 2551Q quarterly, AND the 1701Q quarterly as well… is this correct? do i remove the 2551Q from my settings and just have the 1701Q? i hope you can clarify … thank you!

  8. hi there… i have been a taxumo subscriber for a few months now. just a quick question… i hope you can clarify… in my settings, i opted to take the 8% Tax option… the thing is, i just noticed that i have been filing both the forms 2551Q quarterly, AND the 1701Q quarterly as well… is this correct? or should i just remove the 2551Q from my settings and just file the 1071Q? is that ok and will i need be in trouble with this. hope you can clarify … thank you!

  9. Hi! I just would like to ask if there is really in need to submit the form of 1701q even if there is no payment? Bec when I went to our RD,the officer said that there is no need to come to the office for submission if there’s no payment . Filing and sending through email is already okay. Is this true? Thanks for the reply.
    God bless

  10. Ma. Teresa C. Espineli

    Good evening. I have filed 1701Q thru ebirforms. Unfortunately, I filed it one day late and the bank refused to accept it and advised me to file another one with computation of penalty. How shall I do it when I already filed it online? Do I have to file another one with computation of penalties?

  11. hi, we are a partnership operating 2 different franchise, registered on diff RDO due to location. The 1st has the 000 – as the first company, the 2nd franchise has the 001, on another RDO and franchise is not same with the 1st. based on the COR of the 1st business – income tax should be filed, 1702Q, however, the 2nd business COR has no Income tax, only percentage tax. Does this mean we have to combine both business and the filing will be on the 1st franchise only? pls help. thanks

  12. Hi, im a newbie, i filed my 1701Q late this 2 quarter by e-bir form, and made payment thru online by gcash, i waited for email confirmation, do they include the penalty online or i need to report personally to the BIR office?

    1. There is no automatic computation of penalty when you filed late and submitted online. Submit a late file fee using 0605 form (amount depend on your income) usually its p1k for low income.

  13. Hello! Can I ask if I will be exempted even though I am in the graduated tax (OSD) if my taxable income is below 250000? And if it will exceed how do I compute it? Is it the excess from 250000 and 20%?

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