There are many of Freelancer Photographers & also a Graphic Designers here in the Philippines does not pay their taxes

I am one of those hehehe

Where do I pay taxes?

Is it necessary to pay taxes for the freelancer?

BIR and you'll be the first....j/k

Hahaha! Probably

i was once told that even those that are into reselling of eload among small sari-sari stores are supposed to pay taxes for the profit they get out of it which are quite small compared to what a freelance photographer is getting once in a while. one good thing of having an O.R. with you is you won't be limited to accept jobs once the opportunity knocks at your door from let's say corporate accounts which will definitely need O.R. for accounting purposes.

There are many of Freelancer Photographers & also a Graphic Designers here in the Philippines does not pay their taxes

I am one of those hehehe

Where do I pay taxes?

Is it necessary to pay taxes for the freelancer?

Hi,

On my own understanding, only who has a fixed monthly income are required to pay taxes. For me it don't make sense, if this month I earn say, 15,000 pesos and next month only 5,ooo pesos. But having a deep thought the taxes are levied against you on a yearly basis, so the summation of it will determine how much you have to pay. Its only my idea on this matter.

I believe the BIR staff can further give you an accurate detail on this.

Cheers and mabuhay.

Jeffrey

Hi,

On my own understanding, only who has a fixed monthly income are required to pay taxes. For me it don't make sense, if this month I earn say, 15,000 pesos and next month only 5,ooo pesos. But having a deep thought the taxes are levied against you on a yearly basis, so the summation of it will determine how much you have to pay. Its only my idea on this matter.

I believe the BIR staff can further give you an accurate detail on this.

Cheers and mabuhay.

Jeffrey

If you earn, whether on fixed basis or not, you should pay taxes. The government is our silent partner in everything that we do, and in all that we earn. I suggest you consult with an accountant so you can put your papers in order. The fines for non-payment can be very high.

On the other hand, an income tax return that shows a fair income can help you get visas from embassies, get loans from banks, get approval for credit cards and other such financial activities where you need proof of your capacity to spend/pay.

Do most freelance photographers just use an SOA letter? How do you go about doing a job for a company may it be a small or large company

I believe the correct category on such kind of employment is "Self-Employed" and the Bureau of Internal Revenue (BIR) has established mechanisms to collect/receive tax payments from such job category. Paying taxes, irregardless of amount, is a responsibility of every citizen. The very basic tax that each individual pay is the residence certificate tax (aka: sedula); it simply recognizes you as a legitimate Filipino citizen who currently lives in a particular location (vs. an NPA = no permanent address).

As a freelance photographer, you do pay taxes in certain aspects of your freelance-job. For example, whenever you print your photos for your clients, V.A.T is already included. All purchases you make carries a corresponding value added tax nowadays. In a sense, you are already giving portion of your earnings.

Bottom line is... paying income tax makes us more responsible citizens. Its an institutionalized responsibility of every individual who believes in the sanctity of society and social order.

But where do tax payments go? That's a different story... and a different thread perhaps; let's not talk about it here.

If you earn, whether on fixed basis or not, you should pay taxes. The government is our silent partner in everything that we do, and in all that we earn. I suggest you consult with an accountant so you can put your papers in order. The fines for non-payment can be very high.

On the other hand, an income tax return that shows a fair income can help you get visas from embassies, get loans from banks, get approval for credit cards and other such financial activities where you need proof of your capacity to spend/pay.

mam harvey, what if we can't afford to pay an accountant? how should we go about it? i for one is a freelance graphic artist (1 year++ na) and i don't know how to do the financial thing... i really want to take this "freelance" thing a step further, so that i could price my services just and fairly in the market (not just for me but for my clients as well). Not to mention the loan approvals that comes with it...:)

Let me push you both up a bit towards the industry you're in.

Taxes are important. It pays for the road you drive onto. The schools you see where millions of children go to. The public structures you photograph. The salaries of millions of public servants and also the pockets of some among them. Our country is young, and it needs those taxes to realize its dreams. Having said this, your contribution, big or small, will be a singular contribution for the good of society. So if you WANT to contribute, taxation is a great way to start.

There are quite plenty of introductions into paying taxes, but let me be brief.

You would have to be employed and earning money before the government can sincerely ask you to help develop the country. If you are employed but NOT earning enough, the government understands your incapacity to contribute so it provides for certain exemptions. (See BIR table of taxes).

Also, you may employ yourself and put up your own company. The government understands your willingness to contribute so it protects your interests. It has a department that takes care of those interests, to begin with there's the Department of Trade and Industry, who will help and assist you start your business and put your feet on the ground. You can create a business all by yourself or you can create a business with partners. Ask them or visit www.dti.gov.ph. You will find everything you need to know there to start your own.

Because our country wants to fulfill its own dreams, it reaches out to "capable" people such as you to help reach those dreams. The IPO protects your graphic and photographic works and a whole lot more than that. The SEC protects your investments and so on.

Earning money from your services is a positive thing. Take care of it. Earning money while you bask in the freedoms that this country provide requires a little bit of reciprocity - this is the reason why we all want (whether we like it or not) to pay our taxes. An accountant is a great and serious help. If you can not afford one yet, try a bookeeper at first. The DTI and BIR offices will welcome all your inquiries and will help you be a taxpayer.

Think of a name. Register the name as your trade name. Register the trade with the BIR. Register the trade with your local government (cityhall). Register the trade with the SSS. Register the trade with Philhealth. When you have all these, payment becomes natural. Problems here and there will be encountered. Approach these in a positive way. You do not learn these things in the classrooms - and everybody else one way or another, has had the same problem you may encounter, so don't be shy to ask. but do ask politely.

Open the doors to your office - and boom!

Goodluck.

Of course, i haven't mentioned the business plan here yet. But that's OT.
God bless you Erwin and Dex.

mam harvey, what if we can't afford to pay an accountant? how should we go about it? i for one is a freelance graphic artist (1 year++ na) and i don't know how to do the financial thing... i really want to take this "freelance" thing a step further, so that i could price my services just and fairly in the market (not just for me but for my clients as well). Not to mention the loan approvals that comes with it...:)

The question might really be - can you afford NOT to have an accountant?

If you don't pay your taxes because you don't have anyone to do bookkeeping and prepare financial statements, the government might run after you and fine you more than what you would have paid an accountant. Or, if you did things yourself without understanding accounting, then you may be overpaying the government without knowing.

Besides, an accountant is not just for computing how much taxes you have to pay. He can also help you see if your business is profitable or not, and how to make it profitable.

In other words, a good accountant is like having a business adviser.

An accountant does not have to work full time for you. If you will diligently keep your receipts for what you spend on and keep records of payments to you, and record them on a regular basis- monthly? weekly? then maybe an accountant needs only to see you once a year, assuming that you are doing freelance work infrequently. Of course, when your freelance business starts to grow, you may need to hire a full-time accountant - but don't worry - when you need a full time accountant - it means your business is doing very well.

If you can't afford an accountant - the least that you can do is to learn some basic accounting so you can do your own. Take a starter course called "Accounting for Non-Accountants" or "Accounting 101." Or buy some easy to understand books on accounting. I'm not sure if there is "Accounting for Dummies."

(Important - keep your personal money separate from your business money - even if you are only freelancing. You may have to open a separate current account for your freelance work and deposit and withdraw business funds from there.)

Or you might want to look for an accountant who is looking for a photographer to do his family portrait. Maybe you can exchange services - free photography for free accounting? :D

Or ask your wife or girlfriend to do accounting for you.:)

Surely, there are ways for you to have this done within your budget.:)

Do let me know which of these suggestions best suits you.

The question might really be - can you afford NOT to have an accountant?

If you don't pay your taxes because you don't have anyone to do bookkeeping and prepare financial statements, the government might run after you and fine you more than what you would have paid an accountant. Or, if you did things yourself without understanding accounting, then you may be overpaying the government without knowing.

Besides, an accountant is not just for computing how much taxes you have to pay. He can also help you see if your business is profitable or not, and how to make it profitable.

In other words, a good accountant is like having a business adviser.

An accountant does not have to work full time for you. If you will diligently keep your receipts for what you spend on and keep records of payments to you, and record them on a regular basis- monthly? weekly? then maybe an accountant needs only to see you once a year, assuming that you are doing freelance work infrequently. Of course, when your freelance business starts to grow, you may need to hire a full-time accountant - but don't worry - when you need a full time accountant - it means your business is doing very well.

If you can't afford an accountant - the least that you can do is to learn some basic accounting so you can do your own. Take a starter course called "Accounting for Non-Accountants" or "Accounting 101." Or buy some easy to understand books on accounting. I'm not sure if there is "Accounting for Dummies."

(Important - keep your personal money separate from your business money - even if you are only freelancing. You may have to open a separate current account for your freelance work and deposit and withdraw business funds from there.)

Or you might want to look for an accountant who is looking for a photographer to do his family portrait. Maybe you can exchange services - free photography for free accounting? :D

Or ask your wife or girlfriend to do accounting for you.:)

Surely, there are ways for you to have this done within your budget.:)

Do let me know which of these suggestions best suits you.

excellent suggestion! thanks for sharing this Tip..:)

Thank you Mr. Marlo Moya and Mam Harvey for the tips and suggestions...

Ma'am Harvey is right, you should hire an accountant. Even those who studied law cannot understand taxation though it is part of the 8 subjects of the bar examination (tinamaan ako dun! hehehe). Besides it is the lifeblood of the nation.
A good accountant can even lessen your tax "legally" like tax avoidance (not tax evasion!), availing exemption, deductions, etc. BTW theres a new Nat'l Internal Revenue Code, therefore the law in taxation had change recently, that's another reason to hire an accountant.

if you will have some difficulty in locating an accountant, try to contact PICPA (Philippine Institute of CPAs) office for the directory of accountants offering bookkeeping and/or accounting jobs. PICPA offices/chapters are all over the country situated in major cities.

last time i know is that you are not required to hire an accountant (Certified Public Accountant) to prepare your financial statements if you haven't reached a certain level of earnings. all you need is a bookkeeper so your finances (income/expenses) are in check.

you can visit the nearest BIR office on your questions regarding taxation. their tax officer in charge should be able to answer your questions for free. :)

last time i know is that you are not required to hire an accountant (Certified Public Accountant) to prepare your financial statements if you haven't reached a certain level of earnings. all you need is a bookkeeper so your finances (income/expenses) are in check.

you can visit the nearest BIR office on your questions regarding taxation. their tax officer in charge should be able to answer your questions for free. :)

You are correct in saying that a CPA is needed only if your income is at a certain level (I am not quite sure how much that is). For incomes that are below that level, a taxpayer's signature on the income tax return suffices.

However, if a business person would consider an accountant, CPA or not, as a business advisor, then every business, no matter what the nature or size, needs an accountant or at least someone who understands accounting, not just bookkeeping. The "accountant" does not even have to be an outsider, it could be the photographer.:)

Then, when the business income is big enough to require the signature of a CPA, then that is a good development, and not a problem. :)