(To be filled up by the BIR)

DLN: Taxpayer PSOC: PSIC: Spouse PSOC: PSIC:

Republika ng Pilipinas BIR Form No.
Kagawaran ng Pananalapi Annual Income
Kawanihan ng Rentas Internas
For Self-Employed Individuals, Estates, and Trusts
(Including those w/ both Business & Compensation Income)
Tax Return 1701
July, 2008 (ENCS)

Fill in all applicable spaces. Mark all appropriate boxes with an “X”.
1 For the Year (YYYY) 2 Amended Return? 3 No. of Sheet/s Attached
Yes No
Part I Background Information
Taxpayer/Filer Spouse
4 TIN 5 RDO 6 TIN 7 RDO
Code Code
8 Taxpayer's Name (For Individuals)(Last Name, First Name, Middle Name) (Estates & Trusts) 9 Spouse's Name (Last Name, First Name, Middle Name) (If applicable)

10 Registered Address 11 Registered Address

12 Date of Birth (MM/DD/YYYY) 13 Zip Code 14 Telephone Number 15 Date of Birth (MM/DD/YYYY) 16 Zip Code 17 Telephone Number

18 Line of Business/Occupation 19 ATC II 011 Compensation 20 Line of Business/Occupation 21 ATC I I 0 1 1 Compensation

II 012 Business I I 0 1 3 Business
II 013 Mixed Income I I 0 1 2 Mixed Income
22 Method of Deduction 23 Method of Deduction
Itemized Deduction 40% Optional Standard Deduction Itemized Deduction 40% Optional Standard Deduction
24 Exemption Status 24A Number of Qualified 24B Is the wife claiming the additional exemption for
Single Married Dependent Children qualified dependent children? Yes No
25 Are you availing of tax relief under Special Law/International Tax Treaty? Yes No If yes, specify
Part II Computation of Tax
Taxpayer/Filer Spouse
26 Gross Taxable Compensation Income (Schedule 1) 26A 26B
27 Less: Deductions
Premium Paid on Health and/or Hospitalization 27A 27B
Insurance not to exceed P2,400 per year.
Personal and Additional Exemptions 27C 27C 27D 27D
Total Deductions (Sum of 27A & 27C/27B & 27D) 27E 27E 27F 27F
28 Taxable Compensation Income/(excess of Deductions over Taxable 28A 28A 28B 28B
Compensation Income) (26A less 27E/26B less 27F)
29 Sales/Receipts/Revenues/Fees (Schedule 2) 29A 29A 29B 29B
30 Less: Cost of Sales/Services (Schedule 3/4) 30A 30B
(For Taxpayer Availing of Itemized Deduction)
31 Gross Taxable Business/Profession Income (29A less 30A /29B less 30B) 31A 31A 31B 31B
32 Add: Other Taxable Income (Schedule 5) 32A 32A 32B 32B
33 Total (Sum of 31A & 32A/31B & 32B) 33A 33A 33B 33B
34 Less: Allowable Deductions
Optional Standard Deduction (Sch. 6) or Itemized Deductions (Sch. 7) 34A 34A 34B 34B
35 Net Income (33A less 34A/33B less 34B) 35A 35A 35B 35B
36 Less: Excess of Deduction over Taxable Compensation Income
(from Item 28A/28B) or the total deductions under line 36A 36B 36B
27E/27F, if there is no compensation Income
37 Taxable Business Income (35A less 36A/35B less 36B) 37A 37A 37B 37B
38 Total Taxable Income(Sum of Items 28A & 37A/28B & 37B 38A 38A 38B 38B
if line 28 results to taxable income, otherwise, 37A/37B)
39 Tax Due 39A 39A 39B 39B
40 Less: Tax Credits/Payments
40A/B Prior Years' Excess Credits 40A 40A 40B 40B
40C/D Tax Payments for the First Three Quarters 40C 40C 40D 40D
40E/F Creditable Tax Withheld for the First Three Quarters 40E 40E 40F 40F
40G/H Creditable Tax Withheld Per BIR Form No. 2307 for the 4th Qtr. 40G 40G 40H 40H
40I/J Tax Withheld Per BIR Form No. 2316 40I 40I 40J 40J
40K/L Foreign Tax Credits 40K 40K 40L 40L
40M/N Tax Paid in Return Previously Filed, if this is an Amended Return 40M 40M 40N 40N
40O/P Other Payment/s made (pls. attach proof of payment-BIR Form No. 0605) 40O 40P
40Q/R Total Tax Credits/Payments(Sum of 40A,C,E,G,I,K,M,O/40B,D,F,H,J,L,N,P ) 40Q 40O 40R 40P
41 Tax Payable/(Overpayment) (Item 39A less 40Q/39B less 40R) 41A 41A 41B 41B
42 Add: Penalties Surcharge 42A 42A 42B 42B
Interest 42C 42C 42D 42D
Compromise 42E 42E 42F 42F
Total Penalties (Sum of Items 42A,C,E/42B,D,F) 42G 42G 42H 42H
43 Total Amount Payable/ (Overpayment) (Sum of Items 41A,42G/41B, 42H) 43A 43A 43B 43B
Aggregate amount Payable/(Overpayment)(Sum of Items 43A & 43B) 43C 43C
If overpayment mark one box only: To be refunded To be Issued a Tax Credit Certificate To be carried over as tax credit next year/quarter
Part III Details of Payment Stamp of Receiving Office/AAB
Drawee Bank/ Date and Date of Receipt (RO's
Particulars Agency Number MM DD YYYY Amount
44 Cash/Bank 44A 44B 44C 44D Signature/Bank Teller's Initial)
Debit Memo
45 Check 45A 45B 45C 45D

46 Tax Debit Memo 46A 46B 46C

47 Others 47A 47B 47C 47D

Machine Validation/Revenue Official Receipt Details (If not filed with the bank)
 BIR Form 1701 (ENCS)-Page 2
Section A Sale of Goods and Services/Receipts/Profession/Compensation Income/Other Income
Schedule 1 Gross Compensation Income
Tax Withheld Compensation Income
Name of Employer TIN
Taxpayer/Filer Spouse Taxpayer/Filer Spouse

48 Total (To Item 26)

Schedule 2 Sales/Receipts From Business/Profession /Service(including amount received from General Professional Partnership)
Taxpayer/Filer: Business Trade Name
Method of Accounting Cash Accrual Others (Specify)
Spouse: Business Trade Name
Method of Accounting Cash Accrual Others (Specify)
Tax Withheld Taxable Sales/Receipts
Name of Payor TIN
Taxpayer/Filer Spouse Taxpayer/Filer Spouse

49 Total

50 Add: Gross Sales/ Receipts not subject to Withholding Tax (EWT)

51 Total Gross Sales/Receipts/Revenues/Fees

52 Less: Sales Returns,Allowances & Discounts

53 Net Sales/Receipts/Revenues/Fees (To Item 29)
Schedule 3 Schedule of Cost of Sales (Trading/Manufacturing)
Taxpayer/FIler Spouse
54 Merchandise/Finished Goods Inventory,Beginning
55 Add: Purchases of Merchandise/Cost of Goods Manufactured
56 Total Goods Available for Sale
57 Less: Merchandise/Finished Goods Inventory, End
58 Cost of Sales (To Item 30)

Schedule 4 Schedule of Cost of Sales (Service)

Taxpayer/Filer Spouse
59 Direct Charges-Salaries,Wages and Benefits
60 Direct Charges-Materials, Supplies and Facilities
61 Direct Charges-Depreciation
62 Direct Charges-Rental
63 Direct Charges-Outside Services
64 Direct Charges-Others
65 Total Cost of Services (Sum of Items 59 to 64) (To Item 30)
Schedule 5 Schedule of Other Taxable Income
Nature of Income Tax Withheld Gross Receipts/Income
Taxpayer/Filer Spouse Taxpayer/Filer Spouse

66 Total (To Item 32)

Section B Deductions
Schedule 6 Computation of Optional Standard Deduction
Taxpayer/Filer Spouse
67 Gross Sales or Gross Receipts (from Item 29/Schedule 2)
68 Add: Other Taxable Income (from Item 32/Schedule 5)
69 Total
70 40% Optional Standard Deduction (To Item 34A/34B)
Schedule 7 Schedule of Itemized Deductions
Particulars Taxpayer/Filer Spouse
71 Salaries and Allowances
72 Fringe Benefit
73 SSS, GSIS, Medicare, HDMF and Other Contribution
74 Commission
75 Outside Services
 BIR Form 1701 (ENCS)-Page 3
Schedule of Itemized Deductions (continuation)
Particulars Taxpayer/ Filer Spouse
76 Advertising
77 Rental
78 Insurance
79 Royalties
80 Repairs and Maintenance
81 Representation and Entertainment
82 Transportation and Travel
83 Fuel and Oil
84 Communication, Light and Water
85 Supplies
86 Interest
87 Taxes and Licenses
88 Losses
89 Bad Debts
90 Depreciation
91 Amortization of Intangibles
92 Depletion
93 Charitable Contribution
94 Research and Development
95 Amortization of Pension Trust Contribution
96 Miscellaneous
97 Total Allowable Expenses not to exceed the sum
of Items 31 & 32 (To Items 34A/34B)

Section C Reconciliation of Net Income Per Books Against Taxable Income

Taxpayer/Filer Spouse
98 Net Income/(Loss) per Books
99 Add: Other Taxable Income/Non-deductible Expenses

100 Total (Sum of Items 98 and 99 )

101 Less: Non-taxable Income and Income Subjected to Final Tax

102 Special Deductions

103 Total (Sum of Items 101 and 102)

104 Net Income/(Loss) Before Premium on Health and
Hospitalization Insurance and Exemptions (To Item 35)

Section D Qualified Dependent Children

Name Birth Date (MM/DD/YYYY) Name Birth Date (MM/DD/YYYY)

I declare, under the penalties of perjury, that this return has been made in good faith, verified by me, and to the best of my knowledge and belief,
is true and correct, pursuant to the provisions of the National Internal Revenue Code, as amended, and the regulations issued under authority thereof.

105
Taxpayer/Authorized Representative/Accredited Tax Agent Title/Position of Signatory TIN of Signatory
(Signature Over Printed Name)

Tax Agent Acc. No./Atty's Roll No. (if applicable) Date of Issuance Date of expiry

Date Issued
Community Tax Certificate Number Place of Issue Amount
MM DD YYYY
106 107 108 109
 BIR Form 1701 (ENCS)-Page 4
If Taxable Income is: Tax Due is: If Taxable Income is: Tax Due is:
Not over P 10,000 5%
Over P 10,000 but not over P 30,000 P 500 + 10 % of the excess over P 10,000 Over P 140,000 but not over P 250,000 P 22,500 + 25 % of the excess over P 140,000
Over P 30,000 but not over P 70,000 P 2,500 + 15 % of the excess over P 30,000 Over P 250,000 but not over P 500,000 P 50,000 + 30 % of the excess over P 250,000
Over P 70,000 but not over P 140,000 P 8,500 + 20 % of the excess over P 70,000 Over P 500,000 P 125,000 + 32 % of the excess over P 500,000

BIR Form 1701 - Annual Income Tax Return

Guidelines and Instructions
Who Shall File Change of Status
This return shall be filed in triplicate by the following individuals regardless of amount If the taxpayer marries or should have additional dependent(s) as defined above during
of gross income: the taxable year, the taxpayer may claim the corresponding personal or additional exemption,
1) A resident citizen engaged in trade, business, or practice of profession within and as the case may be, in full for such year.
without the Philippines. If the taxpayer dies during the taxable year, his estate may still claim the personal and
2) A resident alien, non-resident citizen or non-resident alien individual engaged in trade, additional exemptions for himself and his dependent(s) as if he died at the close of such year.
business or practice of profession within the Philippines. If the spouse or any of the dependents dies or if any of such dependents marries,
3) A trustee of a trust, guardian of a minor, executor/administrator of an estate, or any becomes twenty-one (21) years old or becomes gainfully employed during the taxable year, the
person acting in any fiduciary capacity for any person, where such trust, estate, minor, or taxpayer may still claim the same exemptions as if the spouse or any of the dependents died, or
person is engaged in trade or business. as if such dependents married, became twenty-one (21) years old or became employed at the
For individuals engaged in trade or business or in the exercise of their profession and close of such year.
receiving compensation income as well, this return shall be used in declaring their income.
An individual whose sole income has been subjected to final withholding tax pursuant to Allowable Deductions
Sec. 57 (A) of the Tax Code, or who is exempt from income tax pursuant to the Tax Code and A taxpayer engaged in business or in the practice of profession shall choose either the
other laws, is not required to file an income tax return. optional or itemized deduction (described below). He shall indicate his choice by marking with
Married individuals shall file a return for the taxable year to include the income of both “X” the appropriate box, otherwise, he shall be deemed to have chosen itemized deduction. The
spouses, computing separately their individual income tax based on their respective total choice made in the return is irrevocable for the taxable year covered.
taxable income. Where it is impracticable for the spouses to file one return, each spouse may Optional Standard Deduction(OSD) – A maximum of 40% of their gross sales or gross
file a separate return of income. If any income cannot be definitely attributed to or identified as receipts shall be allowed as deduction in lieu of the itemized deduction. This type of deduction
income exclusively earned or realized by either of the spouses, the same shall be divided shall not be allowed for non-resident aliens engaged in trade or business. An individual who
equally between the spouses for the purpose of determining their respective taxable income. opts to avail of this deduction need not submit the Account Information Return (AIF)/Financial
The income of unmarried minors derived from property received from a living parent Statements.
shall be included in the return of the parent except (1) when the donor’s tax has been paid on For taxable year 2008 which is the initial year of the implementation of the 40% OSD
such property, or (2) when the transfer of such property is exempt from donor’s tax. under RA 9504 which modified the OSD for individuals from 10% of gross income to 40% of
If the taxpayer is unable to make his own return, the return may be made by his duly gross sales/receipts, the deduction shall cover only the period beginning the effectivity of RA
authorized agent or representative or by the guardian or other person charged with the care of 9504 which is on July 6, 2008. However to simplify and for ease of administration July 1, 2008
his person or property, the principal and his representative or guardian assuming the shall be considered as the start of the period when the 40% OSD may be allowed. Hence, the
responsibility of making the return and incurring penalties provided for erroneous, false or following rates and bases shall apply for the taxable year 2008:
fraudulent returns. Period Covered Rates and Bases
January 1 to June 30, 2008 10% of Gross Income
When and Where to File July 1 to December 31, 2008 40% of Gross Sales/Receipts
The income tax return shall be filed with any Authorized Agent Bank (AAB) located Itemized Deductions - There shall be allowed as deduction from gross income all the
within the territorial jurisdiction of the Revenue District Office where the taxpayer is required ordinary and necessary expenses paid or incurred during the taxable year in carrying on or
to register/where the taxpayer has his legal residence or place of business in the Philippines. In which are directly attributable to, the development, management, operation and/or conduct of
places where there are no AABs, the returns shall be filed with the Revenue Collection Officer the trade, business or exercise of a profession including a reasonable allowance for salaries,
or duly Authorized City or Municipal Treasurer of the Revenue District Office where the travel, rental and entertainment expenses.
taxpayer is required to register/where the taxpayer has his legal residence or place of business Itemized deductions include also interest, taxes, losses, bad debts, depreciation,
in the Philippines. In case taxpayer has no legal residence or place of business in the depletion, charitable and other contributions, research and development, pension trust,
Philippines, the return shall be filed with the Office of the Commissioner or Revenue District premium payments on health and/or hospitalization insurance.
Office No. 39, South Quezon City. Premium payment on health and/or hospitalization insurance of an individual taxpayer,
This return shall be filed on or before the fifteenth (15th) day of April of each year including his family, in the amount of P = 2,400 per year, per family, may be deducted from his
covering income for the preceding taxable year. gross income: Provided, that said taxpayer, including his family, has a yearly gross income of
not more than P = 250,000. In case of married taxpayers, only the spouse claiming the
When and Where to Pay additional exemption for dependents shall be entitled to this deduction.
Upon filing this return, the total amount payable shall be paid to an Authorized Agent
Bank (AAB). In places where there are no AABs, the tax shall be paid with the Revenue Penalties
Collection Officer or duly Authorized City or Municipal Treasurer who will issue a Revenue There shall be imposed and collected as part of the tax:
Official Receipt (BIR Form 2524)). When the tax due exceeds P2,000.00, the taxpayer may 1. A surcharge of twenty five percent (25%) for each of the following violations:
elect to pay in two equal installments, the first installment to be paid at the time the return is a) Failure to file any return and pay the amount of tax or installment due on or
filed and the second, on or before July 15 of the same year. before the due dates;
Where the return is filed with an AAB, taxpayer must accomplish and submit BIR- b) Filing a return with a person or office other than those with whom it is
prescribed deposit slip, which the bank teller shall machine validate as evidence that payment required to be filed;
was received by the AAB. The AAB receiving the tax return shall stamp mark the word c) Failure to pay the full or part of the amount of tax shown on the return, or
“Received” on the return and also machine validate the return as proof of filing the return and the full amount of tax due for which no return is required to be filed, on or
payment of the tax by the taxpayer, respectively. The machine validation shall reflect the date before the due date;
of payment, amount paid and the transaction code, the name of the bank, branch code, teller’s d) Failure to pay the deficiency tax within the time prescribed for its payment
code and the teller’s initial. Bank debit memo number and date should be indicated in the in the notice of Assessment (Delinquency Surcharge).
return for taxpayers paying under the bank debit system. 2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in case any
Overwithholding of income tax on compensation shall be refunded by the employer, payment has been made on the basis of such return before the discovery of the falsity or
except if the overwithholding is due to the fault of the employee then it shall be forfeited in fraud, for each of the following violations:
favor of the government. a) Willful neglect to file the return within the period prescribed by the Code or
by rules and regulations; or
For eFPS Taxpayer b) In case a false or fraudulent return is willfully made.
The deadline for electronically filing and paying the taxes due thereon shall be in 3. Interest at the rate of twenty percent (20%) per annum, or such higher rate as may be
accordance with the provisions of existing applicable revenue issuances. prescribed by rules and regulations, on any unpaid amount of tax, from the date
Gross Taxable Compensation Income prescribed for the payment until it is fully paid.
The gross taxable compensation income of the taxpayer does not include SSS, GSIS, 4. Compromise penalty.
Medicare and PAG-IBIG Contributions, and Union Dues of individuals. Attachments Required
Personal and additional exemption 1. Account Information Form and the Certificate of the independent CPA except for
For taxable year 2008, the following transitory personal and additional exemptions shall taxpayers who opted for the Optional Standard Deduction. (The CPA Certificate is
be used: required if the gross quarterly sales, earnings, receipts or output exceed P 150,000);
January 1 to July 6 to December 2. Certificate of Income Tax Withheld on Compensation (BIR Form 2316);
Personal Exemption Total 3. Certificate of Income Payments Not Subjected to Withholding Tax (BIR Form 2304);
July 5, 2008 31, 2008
Single P 10,000 P 25,000 P 35,000 4. Certificate of Creditable Tax Withheld at Source (BIR Form 2307);
Head of the Family 12,500 25,000 37,500 5. Duly Approved Tax Debit Memo, if applicable;
Married 16,000 25,000 41,000 6. Waiver of husband's right to claim additional exemption, if applicable;
7. Proof of prior years' excess credits, if applicable;
Additional Exemption – maximum of 4 children 8. Proof of Foreign Tax Credits, if applicable;
Every Qualified 9. For amended return, proof of tax payment and the return previously filed;
4,000 12,500 16,500 10. Authorization letter, if return is filed by authorized representative;
Dependent Children
11. Proof of other payment/s made, if applicable; and
For taxable year 2009 and onwards, each individual taxpayer, whether single or married, 12. Summary Alphalist of Withholding Agents of Income Payments Subjected to
shall be allowed a basic personal exemption amounting to Fifty thousand pesos (P50,000.00). Withholding Tax at Source (SAWT), if applicable.
In the case of married individuals where only one of the spouses is deriving gross
income, only such spouse shall be allowed the personal exemption. Note: All background information must be properly filled up.
An individual, whether single or married, shall be allowed an additional exemption of • All returns filed by an accredited tax agent on behalf of a taxpayer shall bear the
P25,000.00 for each qualified dependent child, not exceeding four (4). The additional following information:
exemption for dependents shall be claimed by the husband, who is deemed the proper A. For CPAs and others (individual practitioners and members of GPPs);
claimant unless he explicitly waives his right in favor of his wife. a.1 Taxpayer Identification Number (TIN); and
“Dependent Child” means a legitimate, illegitimate or legally adopted child chiefly a.2 Certification of Accreditation Number, Date of Issuance, and Date of Expiry.
dependent upon and living with the taxpayer if such dependent is not more than twenty-one B. For members of the Philippine Bar (individual practitioners, members of GPPs);
(21) years of age, unmarried and not gainfully employed or if such dependent, regardless of b.1 Taxpayer Identification Number (TIN); and
age, is incapable of self-support because of mental or physical defect. b.2 Attorney’s Roll Number or Accreditation Number, if any.
In the case of legally separated spouses, additional exemption may be claimed only by • Box No. 1 refers to transaction period and not the date of filing this return.
the spouse who has custody of the child or children; Provided, that the total amount of • TIN = Taxpayer Identification Number.
additional exemptions that may be claimed by both shall not exceed the maximum additional • The last 4 digits of the 13-digit TIN refers to the branch code.
exemptions allowed by the Tax Code.
ENCS