It’s tax season again – and the very thought is filling you with dread. Here are five tips to take the pain out of filing your income tax return.
FIND OUT IF YOU NEED TO FILE A RETURN
The good news is that if you earn less than R350 000 a year, you don’t need to fill out a tax return. But this applies if you only have one employer and don’t want to claim deductions such as travel or medical expenses. If you have more than one income source and want a tax rebate, it’s safer to file your return, experts say. ‘It is advisable to always submit a tax return as this will ensure that there are never penalties imposed by SARS in the future,’ says Marc Sevitz, of TaxTim.
GATHER ALL YOUR SUPPORTING DOCUMENTS
Before you fill out your return, make sure you’ve got all the documents you’ll need. These include the IRP5 certificate from your employer, your IT3(a) from your pension fund and IT3(b) certificates for investment returns. In addition to medical aid contribution certificates, you’ll need to know your medical expenses for the previous tax year. ‘If there are out-of-pocket medical expenses that the scheme doesn’t cover – doctor visits or prescription medicine – you’ll need to have kept these invoices so you can claim for them,’ advises Rob Cooper, tax expert at Sage. You will also need your logbook and other documents showing your business travel expenses.
FIND OUT WHAT TYPE OF FILING SUITS YOU
Deciding whether to go into a SARS branch near you, do e-filing or hire a tax consultant is entirely up to you. ‘If you’re retired, live in a rural area or don’t have access to a computer, it might be easier to visit SARS yourself,’ says Rob. If you are computer savvy and your taxes are straightforward, then e-filing would be the way to go. However, if your taxes are more complicated, a tax consultant might be preferable. ‘If you need guidance and are willing to pay for it, then a consultant or online practitioner is best,’ says Marc.
DON’T OVERCLAIM… EVER
It may be tempting to inflate figures in the hopes of getting a bigger payout from SARS, but rather don’t. ‘If you increase your kilometres, you may get away with it the first time, but you won’t indefinitely,’ says Rob. Rather be honest and stick to what you’re owed. ‘If you can’t justify your spending, it raises red flags to SARS. Don’t be dodgy, and rather sleep well at night,’ he says.
FIND OUT IF YOU QUALIFY FOR A REBATE
The nice part of submitting your tax return is the chance that you may get something back from SARS once your return has been assessed. ‘Taxpayers will receive a refund if they have been taxed too much during the year and have deductions or tax credits greater than this tax,’ asserts Marc. This could be for medical or even travel expenses. ‘Ensure you retain all your invoices and your vehicle logbook is up to date,’ says Rob. You’ll also need to have records of your spending for the past five years.
[Image by Pixabay via Pexels]
