Is the tax season filling you with dread … loads of admin, long queues and surprise letters of payments due to SARS?
But, with smarter planning, anyone can turn tax return into something to look forward to.
Budget Insurance’s 5 reasons to file your tax return:
- If you’ve overpaid on taxes, you could qualify for a tax refund from SARS, but this can only happen if you file your tax return.
- If you need a long-term loan, such as a bond or car finance, you may need to produce a Tax Clearance Certificate to qualify. This certificate can only be received if your tax returns are up to date.
- The money you pay towards your taxes goes towards paying for the maintenance of roads, schools and hospitals, and for other government services.
- If you don’t submit your tax return, you could be issued with an admin penalty, payable to SARS. This penalty applies to both individuals and companies who fail to file their tax returns.
- If you need to access money from your retirement fund at any point, you may have trouble getting it without up to date returns. This applies even if you are retrenched, have retired, or need the money for an emergency.
Seven pro tips to file a winning tax return:
- Knowing whether you need to pay tax, what category of taxpayer you are, what is taxable, what is tax-deductible, which tax bracket you fall under, how often you need to submit tax, how to appeal a tax report etc. is the first step to making your tax work for you. SARS’ website has comprehensive and valuable information for individuals, as well as businesses and employers, to become more tax savvy.
- A clear and honest reflection of your financial situation and tax status will go a long way in avoiding nasty surprises.
- Keep an up to date record and proof of your income, expenses, work-related travel etc. Keep work and personal expenses separate, label each trip or amount clearly and update your records at least once a month. This makes it easier to add up the numbers when tax return time comes.
- If there is income that you aren’t taxed on by an employer or client, calculate the amount of tax due and set it aside in an interest-bearing account the moment you receive the payment. Pay these amounts to SARS with each interim / annual tax submission.
- Contributions made towards medical aid, donations, retirement annuities, wear-and-tear on certain assets etc. can be claimed for – meaning that, if they’re approved, you’ll owe SARS less, or even get money back.
- Filing your own tax return has been made much easier by the new eFiling system, so many taxpayers opt to do it themselves. It is, however, wise to consider using the services of a skilled tax consultant.
- If you’ve been working from home during the lockdown, you can choose to claim for home office expenses if you have a dedicated office space and your company hasn’t been paying for your work resources. If you work from home, you may qualify to claim for home office expenses if:
– You are self-employed
– You spend 50 per cent of the tax year working from home
– You work in a dedicated office space in your home that resembles a real office
– You are employed and work from home 50 per cent of the tax year, but your employer doesn’t cover office expenses