No matter where you are in the world, tax season can be a daunting time. South Africa is certainly no exception. Whether you are an employee, self-employed, or a business owner, your taxes need to be dealt with, and the good news is that with the right strategies, you can ensure compliance with the South African Revenue Service (SARS) and maximise your returns. 

While we aren’t financial experts, we are hoping to shed light on the matter so that when you do submit your tax return or engage the services of a tax consultant, you’ll have a better shot of understanding your position and the way forward. 

With that in mind, here are a few essential tax tips aimed at helping you navigate the process effectively. 

Understand Your Deductions 

You would be surprised at just how many taxpayers overlook their potential deductions. Deductions are things like your medical aid contributions, contributions to your retirement annuity, donations to PBOs (public benefit organisations), and if you work from home, you may also qualify for a home office deduction.  

Deductions can significantly reduce your taxable income, so by including these receipts and records you can avoid overpaying on your tax obligations. That’s money that you could otherwise save, invest, or use elsewhere.  

Keep Accurate Records 

Good record-keeping cannot be overstated when it comes to filing your taxes. In case you didn’t know, you should keep all relevant receipts and documents for at least five years – in case SARS requests an audit. As such, you should keep records and receipts for any medical expenses, charitable donations, travel logs for business mileage, and any other applicable deductions. Thankfully, you can use apps to make this much easier and not have to keep physical copies for years and years. 

Punctuality Matters 

Tax submissions aren’t something that you do whenever you feel like it’s time. The deadline for non-provisional taxpayers in South Africa falls at the end of October, while provisional taxpayers have until the end of January, and it’s important that you submit your tax return on time. 

The reason why submitting on time matters is that you could end up paying fines – penalties that will only serve to make your overall taxes more expensive.  

SARS eFiling Is More Than Convenient 

SARS eFiling is a platform that allows you to submit your tax return online, making it way more convenient than visiting SARS. Using eFiling is efficient, secure, it saves you time, and even provides you with guidance on completing your return accurately. For all these benefits, it really pays to familiarise yourself with eFiling features, because these can majorly enhance the ease of your filing process. 

Tips To Maximise Your Returns 

Our goal is for these tips to help you get organised in time for the tax season and to be able to navigate your financial obligations more effectively. Importantly, there are a few things that you can do to go the extra mile and maximise your returns.  

Go the extra mile and maximise your returns: 

• Retirement Contributions – Contributing to an RA helps you save for your retirement and has the added benefit of lowering your taxable income. You can even reinvest any tax refunds back into your RA for additional growth. 

• Work-Related Travel Costs: If you use your vehicle for business purposes, keep a detailed logbook of distances traveled and related expenses so you can claim these costs back. 

• Capital Gains Tax: Take advantage of an annual capital gains tax exemption on the first R40,000 of gains made on investments, which can be beneficial when rebalancing your investment portfolio. 

• Tax-Free Investments: These kinds of investments allow you to earn interest and dividends without incurring taxes.  

Feeling informed?  

While we hope that this information has been helpful, your tax situation may be more complex, or you may still feel uncertain. If that is the case, we urge you to consult with a registered tax practitioner who can help ensure that all your tax affairs are in order and that you’re fully leveraging available deductions and credits. 

Don’t forget that AA Inform is home to a range of useful financial tools and resources that can assist you along the way, including access our Loan Repayment Calculator, property valuation reports, and much more.