Writing articles about things doctors should know about Taxation 101 makes me a go-to person to ask, especially from doctors who has zero knowledge on numbers, more so, taxes.
Even though I write articles that are simple to digest, doctors really don’t have enough time to sit down and understand everything I write. I totally understand their predicament, because it is between saving lives and paying the right taxes. I guess saving lives will always come in priority. The reason why they just hire an accountant is to do all the works from computation, filing and even up to paying.
That is totally fine. But doctors have been asking me the same thing over and over again. This is their question:
“I have an accountant, but how can I make sure he is paying the money I am giving him as per his computation? I don’t have time to monitor if he indeed is paying the money I gave him. What can I do to erase my doubts if he is honest or not because often, I forget how much he ask me to pay and I forget to ask for receipts?”
Here is the simplest trick I do:
I don’t pay in cash directly to my accountant, I pay in CHEQUES/CHECKS.
Pay order to: BIR (ask your accountant the name of the Payee) – The name of the payee will depend on which RDO of BIR you are registered in.
That way, I would know even if I forgot to check the receipt, I know there is no way he can get it, even just a little from the money I pay.
These are the signs he is dishonest or maybe just uninformed:
- If he says it is not allowed to pay in cheques.
- Don’t believe this, because I pay all my taxes (VAT, ITR, etc) in cheques/checks, all the time.
- If he suddenly refuse and say, it would be inconvenient for the both of you.
- Actually it is very convenient because they can even pay your taxes in the accredited banks of your RDO. No need to go to your RDO itself.
Things to consider:
- Competence and honesty are two different things. He may be honest but is he competent?
- Is he doing what he needs to do like filing up your books of accounts?
- Is he computing the right taxes you should pay?
- This is not a surefire way of knowing your accountant’s honesty, but at least you can make sure that your accountant is paying the money you gave him/her to the right agency and not to her/his own nor another person’s pocket.
I may be discussing this in the next few articles but since the deadline for filing of Annual ITR is fast approaching, it is important to know if you can depend on your accountant’s honesty or not.
Update on the TRAIN Law 2018:
Helping you,
Read more:
- Part 1: the Ultimate Guide on How to Register as a Doctor/Physician in BIR
- Part 2: How to Issue Receipts: Guidelines for Moonlighters/Starting Private Practice
- Part 3: How to file INCOME TAX RETURN as a Physician
- Part 4: Penalties for late filing of Income Tax Return for Doctors
- Part 5: How to Compute your Income Tax Return
- Why are Most Filipino Doctors not RICH?
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Are they responsible in filing the book of accounts? Cuz mine is with me. I haven’t put any single ink on it. And i asked if i need to surrender it, she told me just to keep it and she’ll hand me another set of books afger 2 yrs.
And i guess you’re right re the checks. But in my case, once or twice a yr we meet and she gives me all the documents and receipts. Well i hope that the receipts are enough for me to say that she’s honest. But i heard one story from another dr, whose accountant was giving him fake receipts. Im not sure how it happened.
Hi Vinz, we’ll it depends on your arrangement with your accountant. Yung iba kasi filing of ITR lang. Kaw na bahala sa book keeping. Depende sa napag usapan nyo na responsibilities nya. But you have to make sure about your book of accounts. May penalty if walang entry. In case you get checked by bir.
Thanks so much dra. God bless 🙂
Great help! thanks dra pinky!!! 🙂
Don’t forget to share Pao.
Goodpm doctora, Im Dr. Doms Dator and I’ve just read your article about ITR and BIR stuff. I just finished my residency in ophtha and im starting to practice in different clinics, however, i dont know what to do about my obligation on paying my taxes. So i hired a bookkeeper as they call it. So far she already gave me my bir 1905, 0605, my 2303 certificate of registration and a cardboard from bir reminding patients to ask for a receipt. She said she will give me my book and receipts next week. I just want to clarify something. Is it true that you have to update your BIR monthly instead of quarterly? Because she has asked me P2000 for her effort and 500/monthly for updating BIR if i want to. Is it worth it or can we file it atleast quarterly? I dont get the point of updating it monthly if you have to also do it quarterly. Thank you and Godbless. You’re a big help for starting physicians.
Hi doc, you still need to pay monthly percentage tax or vat. That’s monthly. It’s still different from the quarterly ITR.