‘Tax season’ elicits in most people the kind of shudder you’d imagine ‘open season’ to elicit in hunted animals. We all hate doing our taxes and, because of this, we often postpone the inevitable, sometimes with horrible consequences like penalties and waiting hours at SARS.
Here are a few tips to make submitting tax returns a little less painful, not to mention less confusing.
Basics first The first thing to deal with is how to best go about it. Our advice: book several hours for sorting out your taxes and put it in your diary along with business meetings and other non-negotiables. Just get it done. There’s a lot to be said for using a professional consultant to complete your tax return for you – they will sort everything out, giving you peace of mind, and work with a savvy eye on new regulations you may not know about and exactly how to get you the lightest tax bill possible.
Be systematic If you do decide to file your tax return yourself, it helps to be organised. This is one time you really don’t want to overlook the details. Do one type of tax at a time (if doing more than personal income) and go logically through everything from mileage receipts to various tax exemptions, one by one. It will offset any feeling of a never-ending task – a sure way to quit early.
And, pay the price when the taxman comes around. Remember to account for medical aid schemes – you as the main member can get R310 back from SARS, plus another R310 for a dependent and R209 each for any other dependents after that. Every bit helps…
Don’t forget the expat factor Again, if you’re doing your returns yourself, it pays to keep abreast of recent changes. A few months ago, the Reserve Bank changed the laws around taxes to be paid if you are out of the country a certain amount of time in the year. If you are working more than 183 days in a 12-month period, including a continuous period of more than 60 days, you won’t currently be taxed for it in SA – but that changes soon. For those who’ve been overseas extensively, it may be worth checking in with a professional whether or not you’ll be back-taxed for that, and how the new law could benefit you.
Self-employment schemes If you are a contractor, freelancer or any other type of self-employed individual (bar the owner or founder of a business that is not a sole proprietor), then you technically have a non-salary income and can claim expenses on that. This includes things like the bill for a cellphone used for work, office supplies or stationary and even the rent and overheads of an office if you’re renting one. Just remember to be thorough – if you’ve invoiced more than one different company or person in the tax year, you have to declare each and every client.
Commission enquiry If you’re a real estate agent, sales rep or anyone else that gets commission in addition to a salary, you can claim on any commission-related expenses, like airtime used for work and petrol. Many people know this, but did you know that you can also claim travel-related expenses that aren’t only limited to fuel? Even things like flights for work are deductible, which can be a real boon for jobs that are usually very heavy on travel.
Finally, reward yourself There is no end to what people can do when they’re motivated – and it’s a powerful tool you can use come tax season. Reward is a great incentiviser, so motivate yourself by deciding what a tax rebate will go towards, should you get one. Then keep your eye on the prize.
It’s all the little things that make it less taxing, so go easy on yourself and take it one little thing at a time, and start early.