Tax season for individuals and entities such as trusts, institutions, boards and bodies kicks off on 1 July this year.
Here is some advice about how to stay on the South African Revenue Service’s (SARS’s) good side and take the pain out of filing your income tax return for the 2017/18 tax year.
Get your supporting documents together as soon as possible
Depending on the complexity of your tax affairs, you might need to collect documents from several sources to get ready to file your tax return. Some examples of the documents you may require include:
- IRP5 certificate/s from your employer reflecting your income and tax deductions.
- Certificates from your banks, retirement annuity providers and investment firms reflecting your interest earned, capital gains and losses, and retirement funding contributions for the year.
- Your medical aid contribution certificates and receipts.
- Your vehicle logbook if you receive a travel allowance, use a company car or wish to claim travel expenses against income you earned during the year (here’s SARS’s recommended template).
- Section 18A certificates for donations made to registered charities and non-profit organisations.
- Details about any income you earned on top of your salary (rent, freelance work, etc), and any expenses you are claiming against this income (such as phone costs, inventory, travel, etc).
- Financial statements, should you be a sole proprietor.
- All information relating to capital gains transactions, such as sale of a property or business.
If you are self-employed and operate as a sole proprietor rather than a registered company, you will file a personal income tax return. Remember to file bills and invoices for any expenses you plan to claim, should SARS select you for an audit. It would be worth the consideration to pay an accountant to prepare an income statement for you.
File as early as you can
Filing your personal income tax return can be time-consuming and you may encounter snags such as requests for further paperwork or information from SARS. It’s wise to file early to avoid the stress of compiling paperwork with a just a day to go before the final deadline. Important deadlines are as follows:
- Non-provisional taxpayers have until 31 October 2018 to file their annual income tax returns.
- Provisional taxpayers who use eFiling have until 31 January 2019 to file.
- Both provisional and non-provisional taxpayers that submit manually at a SARS office must file returns by 21 September.
Consider getting a tax practitioner to help
Filing a tax return can be laborious and complex, especially if you have several income streams, taxable deductions, and investments to track. It’s often worth paying a registered tax practitioner to file the correct return for you and to give you advice about how you can legally reduce the amount of tax you pay.