In the Philippines, filing an Annual Income Tax Return (ITR) is a requirement for every individual taxpayer who has an income. The deadline for filing the Annual ITR for Individuals is on April 15 of every year. In this article, we will discuss the important information that every Filipino taxpayer needs to know for the upcoming Annual ITR filing in 2022.
Firstly, it is important to understand that the Annual ITR is a summary of all the income earned by an individual in the previous year. It includes income from employment, business, investments, and other sources. The ITR must be filed by every individual taxpayer, including self-employed individuals, professionals, and those who are working for private or government institutions.
For 2022, the tax rates for Annual ITR are the same as the previous year. For individuals with a taxable income of up to PHP 250,000, there is no income tax. For those earning between PHP 250,000 to PHP 400,000, the tax rate is 20% of the excess over PHP 250,000. For those earning above PHP 400,000, the tax rate is 30% of the excess over PHP 400,000, plus PHP 32,000.
Another important point to consider is the tax deductions that can be claimed by individual taxpayers. Deductions can help reduce the taxable income and thus lower the tax payable. Examples of deductions that can be claimed include contributions to the Social Security System (SSS), PhilHealth, and Pag-IBIG, as well as expenses related to health and education.
It is also worth noting that taxpayers can file their Annual ITR manually or electronically. Electronic filing is recommended as it is more convenient and efficient, especially during the ongoing COVID-19 pandemic. The BIR has an online portal for e-filing, which taxpayers can access and use to submit their ITR.
In conclusion, filing an Annual ITR is a crucial part of tax compliance in the Philippines. Every individual taxpayer must ensure that they file their ITR on time and accurately to avoid penalties and interest charges. It is also recommended to work with reliable tax compliance and accounting firms such as YRA Business Solutions Corp. to ensure proper tax compliance and help maximize deductions, reducing tax liabilities, and ultimately achieving their financial goals.