Dr. Angelo is a budding Internist, married, his wife is not employed or engaged in any business. They have a 3 year old daughter Cassandra. He is practicing in 3 hospitals and clinics. How would he compute his income tax? How much does he need to pay in filing his Annual ITR before the April 15 deadline?
This guide is for doctors or physicians that are considered as self-employed or professional. Not under the employed sector. You must have filled up the registration BIR Form 1901 when you registered or you are considered employed but has more than 1 employer (mixed income).
As long as you already have with you your Form 2307, you can already compute tax due on your Annual ITR. You can get this form 2307 from the institution/hospital/clinic where you are practicing.
Once you have completed collecting all your form 2307. You are now ready to compute.
This guide will be for those who opted to use the OSD or Optional Standard Deduction.
Optional Standard Deduction (OSD) – A maximum of 40% of their gross sales or gross receipts shall be allowed as deduction in lieu of the itemized deduction. This type of deduction shall not be allowed for non-resident aliens engaged in trade or business. An individual who opts to avail of this deduction need not submit the Account Information Return (AIF)/Financial Statements.
In a Nutshell, this is how you compute your Taxable income:
Less: Optional Standard Deduction
Less: Personal & Additional Exemptions
Tax Due xxx
Let us answer the sample case:
If you were Dr. Angelo, here are the steps you need to do:
Step 1: Get your Form 2307.
You need to consolidate all of them and add them up per quarter based on months they were withheld. From first quarter (January – March), second quarter (April – June), third quarter (July – September) and fourth quarter (October – December). Add them all up as seen below.
Step 2: To compute the Annual Income tax due:
Dr. Angelo has 1 qualified dependent, so there is additional tax exemption of 25,000. Each family is allowed to deduct 25,000 per dependent up to maximum of 4 dependents or 100,000. Please take note too, that if both couple are working, the husband is given the first priority to deduct unless he declares in writing that he is allowing his wife to get the necessary deductions of their dependent/s instead of him.
To compute for the Income Tax due, see this table:
From the computation above, the tax that still needed to be paid for the filing of the Annual Income tax return of Dr. Angelo is still, Php 18,250.48. He need to file form 1701 along with this payment before the April 15 deadline.
Even though April 15 is the deadline for Annual Income Tax Return filing. You should have known the importance of filing early. In fact, as early as January of the year, you can now file your Income Tax return to avoid the hassle and traffic once the deadline is near.
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Disclaimer: Though this article was based on reliable resources and comprehensive research, this article was provided for educational and informational purposes only, and doesn’t constitute formal professional advice. New laws, rules, issuance, and regulations may render this article obsolete or inaccurate in whole or in part. For more clarifications, please visit and inquire personally with your RDO.
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