They say that nothing in this life is certain, except for dying and paying taxes. Yes, filing a tax return is one of the many inescapable (and sometimes nasty) realities of being a working adult. It’s a legal requirement and failing to file a tax return could land you in serious legal trouble. Though, with a bit of guidance, you can make the most of the tax season and put some much-needed cash back in your pocket.
As LAW FOR ALL’s tax specialist, Hanlie Brand, puts it “Many taxpayers get a bit overwhelmed by the whole tax filing process and end up skipping it altogether. Still, it’s worth it to take the time to get your affairs in order, so you won’t miss out on any of the funds SARS might owe you.”
So, to help you make the most of the tax season, and maximise your tax payout, LAW FOR ALL compiled a handy list of deductions that will help you save on your tax returns:
7 Deductions to Remember on your Tax Returns:
- Contributions to a pension, provident and retirement annuity fund
It pays to invest in your old age, and we’re not just talking about when you retire! Monthly contributions to pension, provident and retirement annuity funds are tax deductible. Subject to a yearly limit of R350 000, you may deduct up to 27.5% of your gross remuneration or taxable income (whichever is the higher).
- Medical aid contributions
You simply cannot afford to fall ill (quite literally) without having a medical aid. If you belong to a medical aid scheme, you qualify for a medical tax credit of R310 for you (the primary member) and the first dependent on your policy. There is also a further tax credit of R209 for every member after that.
- Donations to registered Public Benefit Organisations (PBO)
When it comes to tax returns, charity starts at home, right? If you donate up to 10% of your taxable income to public benefit organisations, you can claim a tax deduction on this donation. However, the PBO needs to be registered with SARS, and it must issue you a valid tax certificate for the contribution received.
- Travel allowances
If you have to travel often for work and your employer pays a travel allowance, you can get some cash back from SARS. Make sure you keep a detailed logbook of your trips and the costs involved otherwise SARS will reject your claim. At least there is some payback for the taxing times spent on the road!
- Commission-related Expenses
If you earn commission on top of a basic salary, that income will be coded as 3606 on your IRP5 form. If that amount makes up more than 50% of your total income, SARS will allow you to deduct all the costs you incurred to make a living from commission income.
- Business expenses if self-employed
Independent contractors, freelancers and sole proprietors, take note. Whether it’s stationery, telephone or employees’ costs, SARS will allow you to deduct all expenses related to making your income. Make sure you are very thorough when it comes to keeping all invoices and records of these expenses. It will pay off in the end!
- Tax-free investment accounts.
In March 2015, government introduced a tax -free investment product to encourage South Africans to save more money. With tax-free investments, investors can invest up to R33,000 per year with a lifetime limit of R500,000. This allows you to take advantage of the medium- to long-term benefits of compounding, without paying any tax on interest, dividends or capital gains tax (CGT).
A final word of advice: Make the tax season less…taxing!
“Submit your tax return on time to avoid unnecessary penalties and interest. Make a note of the deadline for filing returns, otherwise, you could face penalties,” warns Brand. Tax filing season starts for all taxpayers on August 1, 2019. Those registered for eFiling can file returns from July 1, 2019.
We’ve got your back!
LAW FOR ALL offers all Platinum Plus policyholders assistance with filing their taxes, so if all this seems intimidating, it’s best to have a tax professional on your side. Be sure to have a look at LAW FOR ALL’s comprehensive policies. Sign up today!
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