BIR Form 1701-MS: How to Fill Up and File

BIR Form No. 1701-MS is an annual income tax return (ITR) used by self-employed individuals, professionals, and mixed-income earners classified as micro or small taxpayers.

This form summarizes your total income, deductions, tax due, and tax credits for the entire taxable year. It is designed for taxpayers with relatively simpler income structures and offers a more streamlined alternative to the regular 1701.

Who Should File

You should file this form if you are:

• A self-employed individual (business owner or freelancer)
• A professional (e.g., consultant, doctor, lawyer)
• A mixed-income earner (with both salary and business/professional income)
• A resident citizen earning income locally or abroad
• A non-resident individual earning income in the Philippines
• A fiduciary (e.g., trustee, estate administrator) handling business income

You must also fall under:

• Micro taxpayer – Gross sales below ₱3,000,000
• Small taxpayer – Gross sales from ₱3,000,000 to below ₱20,000,000

Who Are Not Required to File

You generally should NOT use this form if:

• You are a purely compensation income earner (use BIR Form 2316 or substituted filing)
• Your income exceeds ₱20,000,000
• You have multiple businesses or complex tax scenarios requiring the regular BIR Form 1701

When to File

• Deadline: April 15 of the following year
• Coverage: January 1 to December 31 of the previous year

If the deadline falls on a holiday, filing moves to the next working day.

Where and How to File

Filing Methods

• eBIRForms (most common)
• eFPS (for qualified taxpayers)
• Manual filing (only if electronic systems are unavailable)

Payment Methods

• Online banking / mobile payments
• Credit/debit cards
• Authorized Agent Banks (AABs)
• Revenue Collection Officers (RCOs)

Required Documents / Attachments

Attach only what applies to your situation:

Income & Withholding Documents

• BIR Form 2307 (Creditable Withholding Tax)
• BIR Form 2316 (if mixed income)
• BIR Form 2304 / 1606 (if applicable)

Financial Documents

• Audited or Unaudited Financial Statements (AFS)
• Notes to Financial Statements
• Statement of Management Responsibility

Tax Credits & Others

• Proof of prior year excess credits
• Proof of foreign tax credits
• SAWT (Summary Alphalist of Withholding Taxes)
• Proof of payment / acknowledgment receipts
• Special Power of Attorney (if filed by representative)

If using Optional Standard Deduction (OSD), AFS is usually not required—but records must still be kept.

Key Features / Important Notes

• You can choose between:
  • Graduated income tax rates
  • 8% income tax rate (if qualified)
• You may pay taxes in 2 installments if tax due exceeds ₱2,000:
  • 1st payment: April 15
  • 2nd payment: October 15
• Overpayments can be:
  • Refunded
  • Converted to tax credit
  • Carried over to next year (irrevocable once chosen)
• The deduction method (Itemized vs OSD) must be consistent for the entire year

Example Scenario

A freelance web developer earning ₱1,200,000 annually with no employer qualifies as a micro taxpayer. They can use BIR Form 1701-MS to report their annual income and may opt for the 8% income tax rate for simpler computation.

How to Fill Out BIR Form No. 1701-MS

Below is a simplified guide to help you complete the form correctly.

Tip: Fill out Part IV (Computation of Tax) first, then go back to Part II. This makes things much easier.

Part I – Taxpayer Information

Item No.	What to Input	Simple Explanation
1	Taxable Year	Enter the year you are filing for (e.g., 2025). This is the income you earned during that year.
2	Amended Return	Select “Yes” only if you already filed before and are correcting something. Otherwise, choose “No”.
3	Short Period	Choose “Yes” if you only operated part of the year (e.g., you just started your business). Most people choose “No”.
4	Civil Status	Your status (Single, Married, etc.).
5	Filing Type	If married, choose if filing jointly or separately. If single, choose “Not Applicable”.
6	TIN	Your Tax Identification Number. You can find this on your BIR registration (Form 1901/2303).
7	RDO Code	Your assigned BIR office. You can find this on your BIR Certificate of Registration (Form 2303).
8	Name	Your full legal name (same as your BIR registration).
9	Email	Your active email address.
10	Contact Number	Your phone number.
11	Source of Income	Choose what applies: business, profession, or mixed (if you also have a job).
12	Tax Type	Choose your tax option: Graduated Rates (normal tax table) or 8% Tax (simpler option for many freelancers).
17	Deduction Method	Choose: Itemized (actual expenses) or OSD (40%) (automatic deduction). You usually decided this in your quarterly filings.
18	ATC	This is a code for your tax type. You can copy this from BIR tables or your previous filings.

Part IV – Computation of Tax (Start Here First)

This is where you calculate your tax. Most numbers here will later be copied to Part II.

A. Compensation Income (if you have a job)

Item No.	What to Input	Simple Explanation
1	Gross Compensation Income	Your total salary for the year. You can get this from BIR Form 2316.
2	Non-Taxable Income	Also from your 2316 (usually benefits not taxed).
3	Taxable Compensation	Item 1 minus Item 2. (You can copy this directly from your 2316.)
4	Tax Due on Salary	Already computed in your 2316—just copy it.

B1. Business Income (Graduated Rates or Itemized/OSD)

Item No.	What to Input	Simple Explanation
5	Sales/Revenues	Your total earnings from business or freelancing for the year.
6	Returns/Discounts	Any refunds or discounts you gave customers (if none, leave blank).
7	Net Sales	Item 5 minus Item 6.
8	Cost of Sales	Your direct costs (only if using itemized deductions).
9	Gross Income	Item 7 minus Item 8.
10A	Expenses (Itemized)	Your business expenses (rent, internet, supplies, etc.). Only if using itemized.
10D	Total Deductions	Add all your deductions (or skip if using OSD).
11	OSD (40%)	If using OSD, just take 40% of Item 7 (no need to list expenses).
12	Net Income	Income after deductions. This is your taxable income from business.
13	Other Income	Any extra income (e.g., side earnings not included above).
14	Total Business Income	Item 12 + Item 13.
15	Total Income	Add salary (Item 3) + business income (Item 14).
18B	Tax Due	Your final computed tax based on the tax table. This will be transferred to Part II.

If using 8% tax instead, skip this section and go to B2.

B2. Business Income (8% Tax Rate)

Item No.	What to Input	Simple Explanation
19	Sales/Revenues	Your total earnings (already net of discounts).
20	Other Income	Any extra income.
21	Total Income	Item 19 + Item 20.
22	Less ₱250,000	Deduct ₱250,000 (only if you have no employer).
23	Taxable Income	Item 21 minus Item 22.
24	Tax Due	Multiply Item 23 by 8%.
25	Total Tax Due	Add salary tax (Item 4) + Item 24. This goes to Part II.

Part II – Total Income Tax Payable

Now go back here after finishing Part IV.

Item No.	What to Input	Simple Explanation
19	Tax (Special Rate)	Usually leave blank unless you have special tax incentives.
22	Tax Due	Copy from Part IV (Item 18B or Item 25).
23	Total Tax Due	Same as Item 22 if no special rates.
24	Tax Credits	Copy from Part V Item 10.
25	Tax Payable	Item 23 minus Item 24 (this is what you owe).
26	Installment	If your tax is big, you can split it (optional).
27	Final Payable	Your actual amount to pay now.
28	Penalties	Only if late filing/payment.
29	Total Amount Payable	Final amount including penalties.
31	Overpayment Option	If you paid too much, choose: refund, credit, or carry-over.

Part V – Tax Credits / Payments

Item No.	What to Input	Simple Explanation
1	Prior Year Credits	Any excess tax from last year you chose to carry over.
2	Quarterly Payments	Taxes you paid during the year (from quarterly returns).
3–4	Withholding Taxes	From BIR Form 2307 (tax withheld from your income).
5	Salary Tax Withheld	From BIR Form 2316 (if employed).
10	Total Credits	Add everything above. This goes to Part II Item 24.

Part III – Details of Payment

Item No.	What to Input	Simple Explanation
36–39	Payment Info	Fill this only after you pay (bank, online, etc.).

Part VI – Tax Relief Availment

Item No.	What to Input	Simple Explanation
1	Tax Relief	Only for special cases (most people can skip this).

Extra Beginner Tips

• Start with your income records + BIR forms (2307, 2316) beside you
• If you’re a freelancer, the 8% tax option is usually simpler
• If you don’t track expenses well, consider OSD (40%)
• Always double-check numbers you copied from other parts of the form