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get more from your tax return
Tax season may never be your favourite time of year, but proper planning can make completing your tax return a little less stressful.
According to the South African Revenue Service (SARS), you should be prepared to pay tax on any form of income you receive. That’s not only restricted to your remuneration (including salary extras like taxable benefits, bonuses, allowances and overtime pay).
It also applies to:
- Profits and losses from any businesses you own
- Income from any trusts of which you are a beneficiary; and director’s fees
Rental income is taxed, along with income from royalties, annuities and pension, and certain capital gains.
There are some other exceptions:
- If you earn less than R250 000, you may be exempt if you earn a salary from only one employer, and if the remuneration is for a full year of assessment (in this case, from 1 March 2015 to 28 Feb 2016)
- If you haven’t been granted any allowances as part of your remuneration, or if you’re not planning to claim any further deductions and receive no income besides your salary
Registering for tax
Not in the above bracket? Then you need to register as a taxpayer with SARS. You can do this online at www.sars.gov.za and by completing an IT77 registration form (also available from your nearest SARS branch). That done, you’ll need to complete your annual tax return. Keep tabs of the tax deadline announced by SARS, as if you have not completed your return by this time, you may be subject to a fine or penalty.
Completing your tax return
Although you can complete your tax return by yourself (many people do so online, through eFiling), you may find it best to consult a professional. They’ll be able to inform you of which documents must be submitted with your return, such as your IRP5 form (the tax certificate issued by your employer), certificates stating interest earned on your income, details of medical expenses and contributions made by your medical scheme, certificates for your annuity fund contributions, your logbook (vital if you have a travel allowance), and other documents related to any other form of income you have received or allowable deductions you wish to make.
You can find a list of individual deductions on the SARS website.
A professional will also be able to give you information about deductions. For instance, if you’re an independent contractor, your tax will be structured differently. For a start, you’ll pay tax only once a year. This makes it important to keep track not only of all your earnings, but also your expenses. SARS recognises that contractors often have to spend money to make money as they have to purchase the resources that are readily available to office workers. They therefore offer relief on these items, allowing you to claim back the tax.
They must, however, be genuinely related to work. For example, stationery and computer maintenance are bona fide expenses, a lunch at a pricey restaurant isn’t (unless you’ve footed the bill for a meeting with a client). Keep all your receipts from such purchases, and submit them along with your return.
If you have a dedicated workspace at home because this is your office base, you can also claim a portion of your bond payments or rental. Working from your dining room table doesn’t count, however.
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