Brace yourself — the start of income tax season is nigh, which means it’s time to prepare to file your tax return. It’s worth always trying to submit your tax return sooner rather than later, as being efficient can save you standing in line at SARS at the last minute if any problems arise.
As a provisional taxpayer, it’s important to register and declare all sources of income to SARS, along with a workings table to show how you arrived at the total submitted. Do be sure to accurately file all proof of interest and income, such as your bank statements and payslips, as well as any proof of allowable deductions, such as medical certificates and retirement annuities. You are legally required to keep all supporting documentation for five years, so find a safe place to put everything you have collected.
By ensuring that you submit all relevant documents from the get-go, you can avoid an arduous audit later down the line. And if you are audited, you can save yourself a lot of hassle by submitting all requested documents straight away. Allow 30 working days before following up on an audit and keep the reference number to hand in case SARS take longer than their permitted 90 days to provide feedback.
A feature on the eFiling website is an inbox, to which taxpayers will receive direct correspondence from SARS. This inbox is also a way for SARS to officially request any additional information, so be sure to read everything you are sent and act accordingly.
Although filing your return can feel like a chore, there are ways you can file your return to save you time, money and frustration this tax season.
1. Medical expenses
It’s advisable to submit all your medical expenses to your medical aid provider — even if you won’t be compensated for everything. The total amount will nevertheless be put on your certificate and could be considered for credits when you submit your return.
Keep all proof of payments for any medical expenses that you have incurred, as SARS will need to review when the amount was actually paid.
To claim any expenses that have not been paid by your medical aid, submit a summary of these expenses to SARS along with the 10 largest invoices and a statement that you can provide proof of other medical expenses if required (make sure you keep all of these invoices for five years).
2. Travel expenses
When it comes to travel claims, it is useful to keep a daily record of your travel expenses. Then you can complete your tax return in accordance with this travel logbook, rather than submitting a return and attempting to create a logbook from memory if you are audited.
If you have bought a car for business purposes, do not include any finance costs as part of the price you paid, as this does not form part of its actual value. Remember to submit the purchase agreement with your logbook when you file your return.
3. Home office expenses
Before you put in a claim for any home office expenses, be sure to have all the correct documents in place. These may include a letter stating that you work from home, expense documents, and a sketch of the property showing the designated area that you use for business.
It is important that there is a distinct demarcation between your office and your home. If you try to claim for any personal item in your home office, it will serve as evidence that you are not using the area exclusively for work. You should also be able to prove, if required, that you do not need to walk through your office space to your home, as then it could be argued that the office is not exclusively used for business, which could result in a penalty.
4. Rental income
Make a summary of your rental income, and deduct any costs you have incurred to generate this income. This includes estate agent fees, levies and rates, and repairs and maintenance costs. However, do note that you cannot claim capital expenditure, but you can deduct wear and tear costs.
5. Retirement annuity
If you don’t already have one, consider getting a retirement annuity as this is tax deductible. Don’t hesitate to arrange a meeting to discuss the best ways you can save for your retirement and make the most of any tax benefits.