Filing taxes can be a daunting task, especially for self-employed individuals and professionals. If you are earning income purely from a trade, business, or profession, the Bureau of Internal Revenue (BIR) has a specific tax form for you—BIR Form No. 1701A. This form is designed for individuals who either:
✔ Opt for the Graduated Income Tax Rates with Optional Standard Deduction (OSD)
✔ Choose the 8% Flat Income Tax Rate (for those with annual gross sales/receipts not exceeding ₱3 million)
If you fall into one of these categories, this guide will help you understand how and when to file BIR Form No. 1701A.
Who Should File BIR Form No. 1701A?
This form is applicable to individuals who earn purely from business or professional practice and are classified as:
✅ Resident citizens earning income within and outside the Philippines
✅ Resident aliens, non-resident citizens, or non-resident aliens earning income within the Philippines
However, you should only use this form if:
🔹 You opted for the Graduated Income Tax Rates and are using the Optional Standard Deduction (OSD) method (40% deduction from gross income)
🔹 You chose the 8% Flat Income Tax Rate, provided your total annual gross sales/receipts and other non-operating income do not exceed ₱3 million
If you claim itemized deductions instead of OSD, you must file BIR Form No. 1701 instead.
Key Features of BIR Form No. 1701A
🔸 Two Filing Options: Choose between the graduated tax rates with OSD or the 8% flat rate
🔸 Simplified Computation: If using OSD, deductible expenses are automatically set at 40% of gross income
🔸 Lower Compliance Requirements: No need to track itemized deductions or submit financial statements
When to File BIR Form No. 1701A?
🗓 Deadline: April 15 of each year (covering income from the previous taxable year)
Late filing may result in penalties, interest, and surcharges, so it’s best to prepare early!
How to File BIR Form No. 1701A?
1️⃣ Prepare Your Documents
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Your income records (sales, receipts, invoices)
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Certificate of tax withheld (BIR Form 2307) if applicable
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Any other supporting documents for tax credits
2️⃣ Choose Your Filing Method
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Manual Filing: Print and submit two copies to the BIR Revenue District Office (RDO) where you are registered
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eBIRForms: Download and fill out the form via the BIR eBIRForms package
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Online Payment: Use GCash, PayMaya, Landbank, or other accredited banks
3️⃣ Compute Your Tax Due
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If using Graduated Tax Rates with OSD: Compute based on the tax table
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If using 8% Flat Tax Rate: Compute 8% of gross income exceeding ₱250,000
4️⃣ Pay Your Taxes
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Pay through Authorized Agent Banks (AABs), online platforms, or Revenue Collection Officers
5️⃣ Submit and Keep Your Copy
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Retain a stamped copy of the form for your records
Tax Rate Comparison: Graduated vs. 8% Flat Rate
| Option | Who Can Use It? | How Tax is Computed? |
|---|---|---|
| Graduated Tax Rates (with OSD) | Any self-employed individual | Based on tax table, deducting 40% OSD from gross income |
| 8% Flat Income Tax Rate | Those with total gross income ≤ ₱3M | 8% on total gross income exceeding ₱250,000 |
✔ The 8% option is often simpler since you don’t have to compute OSD.
✔ The graduated tax rate may be lower if your business expenses are high, making OSD more favorable.
Final Thoughts
Filing taxes doesn’t have to be complicated. If you are a self-employed individual or professional earning purely from business, BIR Form No. 1701A is designed to make your tax filing process easier.
Plan ahead, file on time, and choose the best tax option that works for you! 🚀
Need more help? Visit the BIR website or consult with a tax professional. 💡