Getting Your Books Ready for the April Deadline

By the second week of March, most of the work that determines how your April filing goes has already happened — or hasn't. The return itself is a few hours of encoding; the weeks before it are where the numbers either hold up or fall apart. What follows is a readiness pass you can run this month, while there is still time to fix whatever it turns up.

Know exactly what April is asking of you

Section 51 of the Tax Code puts the annual income tax return for individuals on or before April 15 of each year, covering income for the preceding taxable year. That single date pulls in everything behind it: the trial balance you close from, the schedules that support each line, and the documents you would need if the return is ever examined.

Two January obligations have already passed and are worth checking rather than assuming. Employers were required to furnish each employee a BIR Form 2316 on or before January 31, and to file Form 1604-C together with the alphalists of employees by the same date. There is also a live March item this year: for taxable year 2023, Revenue Memorandum Circular No. 29-2024 moved the deadline for submitting the duplicate copies of Form 2316, along with the Certified List of Employees Qualified for Substituted Filing, from February 28 to March 31, 2024. If that submission is still sitting unprepared, it falls due before your income tax return does.

Finish the reconciliations before you touch the return

A return is only as good as the trial balance under it, and the fastest way to find out whether that trial balance is real is to reconcile. Work through every bank account for all twelve months, not just December — a break introduced in June is invisible in a year-end statement but is still sitting inside your cash balance. Then reconcile the subsidiary ledgers for receivables, payables, inventory and fixed assets back to their control accounts, and clear the suspense and to-be-classified accounts that quietly accumulate through the year.

Advances to and from owners, officers and related companies deserve their own pass, because they are the balances most likely to have been recorded on one side only. In ERPat, the Finance module carries accounts, expenses, payments, loans and reconciliation in one place, so the reconciliation is done against the same records your reports are drawn from, rather than against a spreadsheet copy that has since drifted from them.

Chase supporting documents while people still remember

March is the last comfortable month to ask someone what a payment was for. Go through the year's larger and unusual disbursements and confirm each one has a valid official receipt or invoice attached, in the correct name, with the correct TIN and date. Contracts, lease agreements, delivery receipts and approvals belong with them — a deduction that is genuine but undocumented is, during an examination, hard to distinguish from one that is not.

Where those files live matters as much as whether they exist. Documents scattered across personal drives, email threads and a filing cabinet are documents you will spend hours re-finding under time pressure. The Documents module gives you centralised storage with role-based access controls and version tracking, so the support for a transaction sits somewhere predictable, only the people who should see it can open it, and you can tell which version was the one actually signed.

Withholding is where the gaps get expensive

Expanded withholding is the item that most often turns a tidy set of books into an assessment. Walk the expense accounts that are normally subject to withholding — professional fees, rentals, contractors, commissions, payments to suppliers — and check that tax was actually withheld, remitted, and supported by a certificate issued to the payee. Where it was not, you still have March to decide how to handle it deliberately, instead of discovering it in the middle of an audit.

The rule here changed recently, and the change does not reach the return you are about to file. The Ease of Paying Taxes Act, Republic Act No. 11976, took effect on January 22, 2024 and repealed Section 34(K) of the Tax Code, so non-withholding is no longer a ground for disallowing a claimed deduction or expense for taxable years covering January 1, 2024 onwards. Your 2023 return is not covered by that repeal.

Tie the books back to what payroll already filed

Compensation is usually the largest expense in the books, and it is the one already reported to the BIR in January, so the two need to agree. Compare total compensation expense in the general ledger against the alphalist you filed, then account for every difference: accruals recorded but not yet paid, final pay for employees who left mid-year, and amounts that sit in payroll but are not taxable compensation.

Pay particular attention to how 13th month pay and other benefits were treated. They are excluded from gross income and exempt from withholding up to a total of ninety thousand pesos a year, and any excess above that is taxable compensation that should have been withheld on. If the books and the alphalist disagree, find out which one is wrong now — correcting a figure you have already reported is a slower exercise once April is behind you.

Confirm which rate you are computing at

The applicable rate is not a detail to settle at the end. For individuals, the graduated schedule in force for taxable year 2023 and onwards leaves the first two hundred fifty thousand pesos of taxable income untaxed and steps up through bands above it, which means the care you put into deductions and allowable expenses is what actually moves the final figure.

For corporations, the CREATE Act cut the regular corporate income tax rate to twenty-five percent for domestic corporations in general, and to twenty percent for a domestic corporation whose net taxable income does not exceed five million pesos and whose total assets do not exceed one hundred million pesos, excluding the land on which the office, plant and equipment are situated. Both conditions have to be met, and the asset test is the one growing companies forget to re-check. Confirm which rate applies to you before you compute, not after.

Make the March pass a habit

None of this is complicated. It is only unpleasant when it gets compressed into the first two weeks of April. A March pass run the same way every year — reconcile, document, check withholding, tie out payroll, confirm the rate — turns filing into a transcription exercise rather than an investigation. Keep a short written record of what you checked and what you found, and next year's pass starts from a much better place.