For many Filipinos, especially those who are self‑employed, freelancers, or running small businesses, the start of a new year signals more than new opportunities—it marks the season to prepare the Annual Income Tax Return for 2025. Although taxes for the previous year may feel like a distant memory, preparing the return early in January 2026 ensures that deadlines are met, proper deductions are claimed, and penalties are avoided.

Filing your AITR is not merely a bureaucratic requirement. For self‑employed individuals, it consolidates a year’s worth of earnings, deductions, and taxes paid, giving a complete picture of your financial compliance with the Bureau of Internal Revenue (BIR).

What is the Annual Income Tax Return?

The Annual Income Tax Return is the official document where taxpayers report all taxable income earned during the previous calendar year. In the case of the 2025 AITR, it summarizes income earned from January 1, 2025, to December 31, 2025.

This annual report calculates the final tax due, taking into account quarterly payments already made (via BIR Form 1701Q for self‑employed individuals) and any withholding taxes credited. The completed return must be filed with the BIR on or before April 15, 2026.

Who Needs to File the 2025 AITR?

Not all taxpayers are required to file an annual return. Employees whose taxes are withheld at source by a single employer may not need to file separately. However, self‑employed individuals, freelancers, sole proprietors, and professionals earning income independently must submit the return.

The BIR distinguishes forms based on the type of income and deductions elected:

• BIR Form 1701A: For individuals earning income purely from self‑employment or business, and who elect the 8% flat tax or the graduated rate with Optional Standard Deduction (OSD).
• BIR Form 1701: For those with mixed income (business plus compensation) or who do not meet the criteria for Form 1701A.

Choosing the correct form is essential. Filing the wrong form or miscalculating income can lead to penalties, underpayment, or delayed processing.

Key Steps for Preparing Your 2025 AITR

1. Gather financial records
   Collect all invoices, receipts, and statements of earnings from 2025. Accurate bookkeeping is essential for both reporting and claiming allowable deductions.
2. Compile quarterly returns
   Self‑employed individuals should have filed BIR Form 1701Q for each quarter of 2025. These serve as the foundation for computing your annual tax due.
3. Determine your deductions and tax regime
   Decide whether to apply the 8% flat tax or the graduated tax rate with OSD. This choice affects your computation and potential tax liability.
4. Complete the appropriate form
   Fill out either BIR Form 1701A or Form 1701 depending on your income structure. Double-check all calculations and ensure accuracy in reporting.
5. File and pay on time
   Submit your AITR electronically through eBIRForms or eFPS, or at your Revenue District Office (RDO) if manual filing is necessary. Pay the remaining tax due at the time of filing.

Why Compliance Matters

Timely and accurate filing is not only a legal requirement. Proper compliance:

• Avoids penalties and interest imposed by the BIR
• Supports loan or financing applications with proof of income tax compliance
• Prevents audit complications in the future
• Ensures peace of mind and proper financial recordkeeping

For self‑employed individuals, failure to file accurately can trigger unnecessary audits or disputes over tax obligations. 

Practical Tips for Self‑Employed Taxpayers

• Start early: Preparing your 2025 AITR in January 2026 gives ample time to review records, reconcile discrepancies, and seek professional assistance.
• Keep detailed records: Maintain organized receipts, books of accounts, and certificates of withholding (BIR Form 2307) to support deductions.
• Use digital platforms: Filing through eBIRForms or eFPS ensures faster processing and reduces errors.
• Consult professionals: Trusted tax services like Tax Assist PH can simplify the filing process, ensuring accuracy and compliance.

The 2025 Annual Income Tax Return, filed in 2026, is more than a formality—it is a key aspect of financial management for self-employed individuals. With professional support from Tax Assist PH, taxpayers can prepare, file, and pay their taxes confidently and accurately.

Starting your preparation early in January 2026 gives you sufficient time to organize records, reconcile payments, and file your return before the April 15, 2026 deadline. Whether you handle your taxes independently or with professional guidance, staying informed and compliant ensures both legal security and financial peace of mind.