Why Do Freelancers need to Pay Taxes?
Having a trusty tax calculator in the Philippines can come in handy when it is the tax-paying season. For freelancers, the responsibility of paying taxes is still present even when they are not employed by a private entity and the is why they also need a tax calculator. In the Philippines, however, there are still some people who neglect paying their taxes. There are a lot of freelancers that find projects online and they almost get paid instantly which makes them forget about filing their taxes. Well, here in this article, you can see the reasons why freelancers need to pay taxes, read more below:
You need to think long-term
If you are planning to buy a house or a car, this lifetime investment may require you to secure a loan to buy one. This will mean that you would be presenting an actual proof that you have the earning capacity to pay for it. But if you would want to buy your dream car in cold hard cash, then you wouldn’t need to show your income tax returns to the company or organization. You are required by Philippine law to pay taxes. Not paying means breaking the law and breaking it will bring about many consequences. Without question, you would be penalized heavily by the BIR.
You’re in control of your taxes
When you register as a tax-paying self-employed professional will give you the opportunity to declare your taxable income without the BIR’s directive on how much you have to declare every year. Being self-employed means that you are in full control of your tax situation, and you can reduce current income by any losses you can incur from freelancing.
You save yourself from a lot of inconveniences
Paying your taxes by yourself may seem like a hassle and you might think that you can do away without a particular service but as your career or business grows, neglecting to file your taxes will be the risk and you might need other payment methods besides cash. If you are planning to apply for a credit card, a phone line, an internet connection installation any time soon, then it will definitely be easy if you have Income Tax Returns (ITS), Social Security System (SSS) registration, and other income-related documents on hand to back up your application.
You’re doing your part as a citizen of the Philippines
Paying your taxes is more than just reaping the benefits for yourself but it is your duty and responsibility as a citizen of this country. As a freelancer, technically you have the opportunity to evade taxes and live a tax-free life, but it is always good to know that you can stand by your responsibility by diligently calculating and paying for your taxes. Don’t worry because with the technology nowadays, it easier to file and pay for your taxes with online tax calculators and payments.
Being a freelancer does not excuse you in paying taxes. As a registered taxpayer, you simply have to declare your income and pay taxes on it, now that doesn’t so hard, does it? If you are working for a client abroad, then read up on tax treaties with other countries against double taxation so you would know what move to do from there.