If the very thought of getting a TIN (or even looking up what it stands for) intimidates you, welcome to the club.
Learning how to file taxes is a scary process at first, but we promise that it gets easier over time. As with anything, it all just takes a bit of getting used to.
Young STAR partnered with the tax assistance platform Taxumo back in February for a tax cheat sheet that outlined the basics that every freelance taxpayer has to know once they get a TIN. This time around, we talk to four young business owners about their experience using the platform.
How did you start your journey with taxes?
Vinze: I’m more into the accounts and managing the clients. Before, I hired a bookkeeper, but I felt like it was hard to trust someone, especially with money. I wanted to be hands-on. I didn’t used to see the receipts at all. I’d give [the bookkeepers] the receipts, and then they would do it. I didn’t feel secure with that because I was scared that there might be lapses, or for instance, if they forgot to pay. Our company would suffer.
Kat: I was a corporate employee for eight years so I know how important it is to have an ITR (Income Tax Return). If you are a young professional, you need to think long term. Having an ITR is necessary in practically any adulting task such as getting a house loan or a car loan. When I decided to freelance and start my own business, I knew I’d have to manage my own taxes. I tried to learn on my own but I got overwhelmed and eventually hired someone to do it for me.
Andrea: At first, I started selling notebooks on Etsy. Because we had recycled paper in the office [where I was working], I asked my boss if I could use it. Those notebooks made a lot of my old clients notice me. When I was doing my notebooks, [Heima] asked if I could work with them for some projects, so I’m working full time, and I’m doing all these side-projects. After three years from that company, I decided that I could register my own business because I have so many clients.
What kinds of difficulties did you encounter before?
Andrea: I registered for my business by myself as a sole entrepreneur. I’ve registered a business name in DTI (Department of Trade and Industry), I’ve registered all my papers in the municipal building. I registered at the BIR (Bureau of Internal Revenue) all by myself, so it got so tiring. I registered in Laguna, but I had so many clients in QC that I stayed there for three years. It was very hard to commute every time I had to pay taxes.
What are the pros and cons of using a tax assistance platform versus an accountant?
Vinze: The journey began when we had our IRS training for digital training. Sir Genesis [Reonico] opened to us that as a freelancer, we have to pay our tax. We got the chance to try Taxumo, and we think it’s easier if you’re going to pay online and then connect sa account namin. It’s hassle-free. I just have to input the receipts we have.
Kat: After I registered my business to BIR, I was given a payment schedule that I have to religiously follow or else face penalties from BIR. Just the thought of manually filling up forms and lining up in banks monthly is not a fun idea for me so I decided to search for ways to do this online. As an Internet marketer I love SaaS-based platforms (Software as a service) that make life easier by automating time-consuming tasks so I was completely sold.
Andrea: The pro of Taxumo is it’s handy — you can log in anytime. I’ve had experiences where I was asking them for my forms, and they could easily contact me. The pros with the accountants is they know a lot of people locally. They have friends in BIR, Pag-Ibig. If they can process you, much easier. But you have to call them and meet them.
Kat: Aside from cost, Taxumo provides transparency. Being super hands-on with my business, it is important that I see my cash flow rather than trust someone and blindly pay for an amount that I don’t really understand how it’s computed.