First off, what does 1601C pertain to? If you may have forgotten, it refers to the Monthly Remittance Return of Income Taxes Withheld on Compensation.
Once you selected the forms 1601C/1604C in the settings, the tax cards will appear on the tax dues tab and the compensation tab will appear on the navigation bar.
If you want to read more about this form via the original source, you can head here!
Now that you know what it means and where it's from, what are some things to remember when we actually use it?
The
Tax Due Amountseen on the 1601-C card is the summation of all withheld taxes on compensation for all salary expenses entered in theCompensationtabSo if you want to know how much withheld tax is there per employee, you can check per salary expense in the
Compensationtab
A common question that we also get from some of our users: "What if we pay our employees semi-monthly or every 2 weeks? Will the withholding tax still be computed correctly?"
Yes, it will! Take note that each time a salary is given, you should input it as a salary expense under the Compensation tab. So it follows that if you release salaries semi-monthly, then that's two salary expenses in the Compensation tab per employee. Additionally, you should categorize each salary expense as semi-monthly!
To help you further visualize, here's an example: User X releases salaries every 15th and 30th of the month for Employees A and B. Here's what it would look like under the Compensation tab:
1 salary expense on the 15th for Employee A
1 salary expense on the 30th for Employee A
1 salary expense on the 15th for Employee B
1 salary expense on the 30th for Employee B
This happens because, by definition, each salary that is released is considered an expense to the business.
Another common question we receive from our users is: "What should I do if I have adjustments to withheld taxes from previous months? How can I do this in Taxumo?"
Adjustments are necessary when your tax payment from previous months does not match the correct tax due computation. You can easily make these adjustments in the presubmission section of the Form 1601C tax card for the current month. Simply input the required details in the following schedule:
To help you visualize, here's an example: User X filed Form 1601C for January outside of Taxumo and paid a tax due of P500. After filing, he discovers that certain adjustments in January resulted in a lower tax due of P400. In February, he starts filing Form 1601C in Taxumo. To reflect the P100 adjustment, he needs to input the details as shown in the screenshot above.
Month and Year: The period the adjustments are based on.
Date Paid: The date the tax due payment was made.
Drawee Bank/Code/Agency: The mode of payment used. If the adjustment is for additional tax due (positive adjustments), enter "NA" here.
Number: The transaction number when the payment was made. If the adjustment is for additional tax due (positive adjustments), enter "NA" here.
Tax Paid: The amount of tax paid in the month where the adjustment is coming from. If the adjustment is for additional tax due (positive adjustments), enter "0" here.
Tax Due for the Month: The correct tax due amount for the month where the adjustment originated.
Adjustments: A negative adjustment reduces your tax due for the month. This occurs when the tax paid exceeds the correct tax due for a particular month. A positive adjustment increases your tax due, which happens when the tax you paid is less than the correct tax due for that month, requiring an additional payment.
NOTE: Make sure to keep a copy of all your payment records and tax filings as proof of the adjustments you make. :)