Many freelancers worry: “I forgot to check the 8% option when registering. Can I just indicate it when filing my ITR?”
This is a critical question because the 8% tax rate under the Optional Standard Deduction (OSD) can reduce your tax liability significantly. Knowing how to correct this can save money and prevent issues with BIR.
What Is the 8% Tax Option?
The 8% tax option applies to mixed-income earners and freelancers using the optional standard deduction (OSD).
- Instead of itemizing business expenses, you pay 8% of gross sales or receipts.
- It simplifies filing and reduces compliance burdens.
If you skip this step during registration, your tax type may default to regular income tax, which can be higher and more complicated.
Why This Matters
- Using the 8% rate can lower your taxes legally.
- Avoids unnecessary paperwork for itemized deductions.
- Ensures your filing is compliant and stress-free.
Missing this option could cost freelancers money and create confusion during ITR filing.
How to Indicate the 8% Tax Later
- Check your current registration – Confirm if you mistakenly left the 8% option unchecked.
- Amend your BIR registration – Submit a BIR Form 1905 to update your tax type.
- File ITR using the 8% rate – Only after the amendment is processed can you legally indicate 8% when filing.
- Keep proof of amendment – Always keep documents for audit or verification purposes.
Important: You cannot simply indicate 8% during ITR filing without updating your registration first. Doing so may trigger penalties or discrepancies.
When/Who Should Do This
- Freelancers and self-employed individuals who forgot to choose 8% during registration
- Mixed-income earners seeking the simplest tax filing method
- Anyone starting ITR filing after initial registration
Correcting your tax type early avoids complications later in the year.
Tips for Freelancers
- Double-check all options during BIR registration.
- If unsure, consult a tax professional before filing.
- Keep digital and physical copies of all BIR forms.
- Plan your tax strategy before the first filing to save money and time.
If you forgot to check the 8% option during registration, you cannot simply indicate it when filing. You must amend your registration first using BIR Form 1905. Doing this ensures legal compliance and allows you to take full advantage of the optional standard deduction.
Proper early action will save you stress, penalties, and overpayment in the future.
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