Tax tips for first-time taxpayers

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This year has seen a change in the tax-filing process (iStock)
This year has seen a change in the tax-filing process (iStock)
  • The usual deadlines for tax submissions have been spanned out through a new phased process.
  • The last phase is due to start on 1 September.
  • SARS provides an extensive list of supporting documentation that will be required for filing your return.


This year has seen a change in the tax-filing process, as SARS continues on its quest to streamline and digitise the procedure, says Danielle Luwes of Hobbs Sinclair Chartered Accountants.
 
The usual deadlines have been spanned out through a new phased process. Phase 1, with a deadline of 31 May 2020, was for employers and other third-party data providers such as medical schemes, retirement annuity funds and banks to submit information direct to SARS. That was followed by a phase during which SARS validated third party.

An "auto-assessment" process started on 1 August 2020, typically relating to taxpayers, who normally just receive one source of income like a salary and have a medical aid or retirement annuity; and may receive interest on their bank accounts.

The last phase is due to start on 1 September, when the remaining taxpayers, with more intricate tax returns, and those that have not accepted or received an auto-assessment, can submit.

"It is important to check if you need to file a tax return," says Luwes. "Don't leave it to the last minute and don't throw away any of your documentation. Do your research on what expenses you can claim and find out about any tax incentives that may apply to you."

You do not need to submit a return:

  • If your total salary for the tax year was not more than R500 000
  • And you have only one employer
  • And no car allowance, company car, travel allowance or other income like interest or rental income
  • And you are not claiming tax-related deductions or rebates like medical expenses; and travel and retirement annuity contributions, other than pension contributions made by your employer.

Documentation required

SARS provides an extensive list of supporting documentation that will be required for filing your return, but in essence all documentation which supports your claim must be submitted, according to Luwes.

Make sure that you cover:

  • Income
  • IRP5/IT3 (a) from your employer
  • Proof of rental income (if applicable)
  • Business/Services Income
  • Consulting invoices (valid tax invoice)
  • Interest Income
  • Dividend Income
  • Royalties
  • Pension or Retirement Fund Lump sums
  • Investment earnings
  • Expenses
  • Qualifying tax-deductible business expenses
  • Medical Aid Tax Certificate
  • Retirement annuity tax certificate
  • Log book if travel allowance or car allowance is claimed
  • Rental expenses (rates and taxes, levies, telephone, internet, water and electricity, depreciation of equipment or furniture and fittings, insurance, interest on bond, security, cleaning supplies and repairs and maintenance)
  • Business income expenses (telephone, internet, insurance, vehicle expenses, subscriptions, home office expenses and depreciation of equipment/vehicle)

If Capital Gains tax is invovled you must provide:

  • Proof of sale of asset
  • Conveyancer Certificate (for property)

Be mindful of the various types of tax:

  • Work salary tax (PAYE) already deducted by your employer
  • Medical Aid Tax Credits
  • Foreign Tax Credits (tax already paid in another country)
  • Tax Incentive Certificates (if applicable)
  • Section 12J Venture Capital Company Investment Certificate (if applicable).

* Compiled by Carin Smith

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