BIR Form No.

1700 - Annual Income Tax Return For Individuals Earning Purely

Compensation Income (Including Non-Business/Non-Profession Related Income)

Description

This return shall be filed by every resident citizen deriving compensation income from all
sources, or resident alien and non-resident citizen with respect to compensation income
from within the Philippines, except the following:

1. An individual whose taxable income does not exceed P 250,000.00;

2. An individual with respect to pure compensation income, as defined in Section 32(A)

(1) derived from sources within the Philippines, the income tax on which has been
correctly withheld (tax due equals tax withheld) under the provisions of Section 79 of the
Code: Provided, that an individual deriving compensation concurrently from two or more
employers at any time during the taxable year shall file an income tax return;

3. An individual whose sole income has been subjected to final withholding tax pursuant
to Section 57(A) of the Tax Code; and

4. A minimum wage earner as defined in Section 22(HH) of the Tax Code or an

individual who is exempt from income tax pursuant to the provisions of the Tax Code
and other laws, general or special.

Filing Date

This return shall be filed on or before April 15 of each year covering income for the
preceding taxable year.
BIR Form No. 1701 - Annual Income Tax Return For Individuals
(including MIXED Income Earner), Estates and Trusts

Description

BIR Form No. 1701 shall be filed by individuals who are engaged in trade/business or
the practice of profession including those with mixed income (i.e., those engaged in the
trade/business or profession who are also earning compensation income) in accordance
with Sec. 51 of the Code, as amended. The annual income tax return summarizes all
the transactions covering the calendar year of the taxpayer.

This return shall be filed by the following individuals regardless of amount of gross
income:

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.

4. An individual engaged in trade or business or in the exercise of their profession and

receiving compensation income as well.

Filing Date

This return shall be filed on or before April 15 of each year covering income for the
preceding taxable year.
BIR Form No. 1701A - Annual Income Tax Return for Individuals Earning
Income PURELY from Business/Profession (Those under the graduated
income tax rates with OSD as mode of deduction OR those who opted to
avail of the 8% flat income tax rate)

Description

The return shall be filed by individuals earning income PURELY from trade/business or
from the practice of profession, to wit:

1. A resident citizen (within and without the Philippines);

2. A resident alien, non-resident citizen or non-resident alien (within the Philippines).

The return shall only be used by said individuals as follows:

A. Those subject to graduated income tax rates and availed of the optional standard
deduction as method of deduction, regardless of the amount of sales/receipts and other
non-operating income; OR

B. Those who availed of the 8% flat income tax rate whose sales/receipts and other
non-operating income do not exceed P3M

Filing Date

This return shall be filed on or before April 15 of each year covering income for the
preceding taxable year.
In 2024, Mr. X earned P2,200,000 from practice of profession as a lawyer. He, then incurred
P1,500,000 in operating expenses during the taxable year.

Determine his income tax due.

1) Using the Graduated Tax Rates

Gross Receipts P2,200,000
Less: Operating Expenses 1,500,000
Taxable Income P 700,000

1st P400,000 = P30,000

P300,000 x 30% or .3 90,000
Tax due P 120,000

2) Using the 8% Tax Rate

Gross Receipts P 2,200,000
Less: Exempt 250,000
Taxable Income 1,950,000
Multiplied by: 8% or.08
Income Tax due P 156,000
BIR Form No. 1701Q - Quarterly Income Tax Return For Individuals,
Estates and Trusts

Description

This return shall be filed in triplicate by the following individuals regardless of amount of
gross income:

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.

Filing Date

1 qtr - On or before May 15 of the current taxable year

st

2 qtr - On or before August 15 of the current taxable year

nd

3 qtr - On or before November 15 of the current taxable year

rd
ILLUSTRATION No. 1

Individual Earning Purely Compensation Income uses BIR Form 1700

 ILLUSTRATION NO. 2

Husband and Wife Earning Purely Compensation Income use BIR Form 1700

HUSBAND WIFE
REGULAR COMPENSATION:
Basic Salary 800,000 500,000
MANDATORY DEDUCTIONS:
SSS, Philhealth, Pagibig Contributions 40,000 30,000
SUPPLEMENTAL COMPENSATION:
Overtime Pay 250,000 160,000
Commissions 80,000 50,000
Christmas bonus 50,000 40,000
Cash Gift 5,000 5,000
Uniform and Clothing Allowance 7,200 6,000

Determine the Income Tax due for both spouses filing ITR together.

BIR FORM 1700 ANNUAL INCOME TAX RETURN

INDIVIDUALS EARNING PURELY COMPENSATION INCOME
(Husband and Wife)
ILLUSTRATION No. 3 : Individuals (Including Mixed Income Earner), Estates and Trusts
MIXED INCOME EARNER:
Mr. Ambrosio delos Trinos reported the following income and expenses in 2024:
Compensation Income P800,000
Withholding Tax on Compensation 120,000
Gross Income from business 500,000
Fully deductible contributions 50,000
Mandatory contributions on compensation 75,000
Cost of Sales 200,000
Mandatory deductions 75,000

Determine the following :

a. Deductible contribution expense
b. Taxable compensation income
c. Net income
d. Taxable income
e. Tax due

a. Deductible contribution expense:

Fully deductible P50,000
Subject to limit:
10% of net income= Gross Income – Cost of Sales/Other Expenses
P500,000 – 200,000 = P 300,000 x 10% 30,000
Total P80,000

b. Taxable compensation income

Compensation income P800,000
Less: Mandatory deductions 75,000
Taxable compensation income P725,000

c. Net income:
Gross income from business P500,000
Less: Cost of Sales 200,000
Gross profit 300,000
Less: Contributions 80,000
Net Income 220,000
Add: Taxable Compensation 725,000
Taxable Income P945,000

d. Creditable Tax withheld (BIR Form 2307) P20,000

Creditable Tax Withheld for 1st 3 quarters 15,000

Attachment:
BIR Form 2307 and BIR Form 2316