The sad reality is many people living in the Philippines have more than one job. Usually, the paltry salary of regular employment is not enough for a family to subsist on, especially with the high cost of living and continuous inflation of goods. Those who are also actively building their savings take on more roles to build their nest eggs.
If you fall into this category with multiple side hustles, apart from your day job, you are considered a mixed income earner. You may be wondering how to pay the right taxes if your employer’s Accounting, Finance, & HR departments already take care of withholding taxes and other BIR-related work concerns. You’ve definitely come to the right place as this article tackles how to register as a mixed income earner with the BIR.
Defining the Mixed Income Earner
In order to file as one, you must first know what a mixed income earner is. The BIR states that they are those engaged in trade, business, or profession while also earning compensation income. In short, you could be a full-time employee at a company while having a side business or part-time job. Examples of the latter could be:
- Freelancing work from overseas clients
- Rental fees from rented properties
- Online selling
- Being an influencer
- Consultancy work
- Having a franchise
- Part-time photography
How to Register as a Mixed Income Earner
Registration as a mixed income earner is vital if you want to file the correct taxes. Hence, the BIR must first recognize as one. That can only happen if you register yourself as one using BIR Form 1901. Failure to accomplish this means you cannot pay the correct tax dues. The BIR Form 1901 is the application form for mixed-income earners and self-employed individuals who must register before they open a new business.
The Documentary Requirements
To get your Certificate of Registration as a mixed income earner, you must provide the following:
- Government identification card with your name, birthday, and address
- Accomplished BIR Form 1901 in triplicate
- Professionals: provide LGU-issued Occupational or Professional Tax Receipt
- Sole Proprietors: provide a copy of the DTI Certificate or Mayor’s Permit
- Individuals registering a business must show proof of payment of the Annual Registration Fee or BIR Form 0605.
- Triple copies of BIR Form 1906 or the Application for Authority to Print Receipts and Invoices
- Samples of your proposed receipts and invoices plus columnar books for stamping for your bookkeeping and accounting
Notably, depending on the circumstances, the BIR may also require a Barangay Clearance, a SPA, or special power of attorney if you’re using business registration services, or franchise documents. Get in touch with a reputable accounting firm if you need help with the requirements or fill out your BIR Forms.
Completing the Registration
Once you’ve collated all the essential documents, follow these steps:
Step 1: Head to the BIR RDO near your place of business and submit Forms 1901 and 1906, along with other required paperwork
Step 2: Pay Form 0605 at your RDO’s accredited bank. You will be given proof of payment to show the RDO.
Step 3: Pay the DST or Documentary Stamps Tax and Certification Fee.
Step 4: Attend a taxpayer’s briefing which is a requirement so you’ll stay informed on your rights and obligations as a taxpayer.
Step 5: After completing these steps, you will be given your COR or Certificate of Registration, Ask for Receipt Notice, plus authority to print receipts.
Display your COR in the place where you conduct your side gigs. You must also issue proper official receipts and sales invoices. Don’t forget to keep track of them to observe your cash flow. All of these details must be accounted for because they will impact your tax returns and dues.
Things to Remember
After registration, you are a properly registered mixed income earner and can file the correct tax dues. In this category, you need BIR Form 1701 for filing your taxes in accordance with Section 51 of the Tax Code. As a mixed income earner, you are responsible for bookkeeping, accounting, and auditing all your transactions for your side hustles. Pay attention to all official receipts and invoices because you may need to submit supporting documents when you file your tax returns.
The deadline for filing taxes returns for mixed income earners is every April 15. If you fail to comply with the requirements, it can result in a 25% surcharge of the correct dues and a compounding interest of 20% per year from the deadline until fully paid. Avoid miscalculations and possible complications by seeking expert assistance. Call our team for business registration services, bookkeeping, accounting, and auditing. We guarantee precise computations and proper tax compliance to prevent complex problems from arising.