Two things are certain: death and taxes.
Neither of those things is particularly pleasant to think about, but both require a fair amount of planning.
At least that’s what the telemarketer from the life insurance company keeps telling me about death.
Taxes are a little easier to manage if you know what you’re doing.
Unfortunately, most of us don’t know what we’re doing, which is why IOL put together a list of four common mistakes that people make when filling out their personal tax returns, ahead of the tax deadline, December 4, 2019.
That’s December 4 as in next Wednesday – yeah, the clock is ticking.
Mistake 1: Not making use of a reputable tax practitioner
We’ve already established that short of a degree in Business Science or Tax Law, most of us aren’t equipped to handle our own taxes. If you’re smart you’ll hand things over to an expert.
Not everyone who claims to be an expert knows what they’re doing and at the end of the day, you are the one who will have to suffer the consequences, so I’m going to make this easy.
Galbraith | Rushby offers professional tax compliance and advisory services to individuals and businesses. Seth’s been letting them run the numbers for years now, and it’s one less thing to worry about whilst living the holiday.
If you insist on going at it alone, here are three further mistakes to watch out for:
Mistake 2: Not declaring travel expenses
If you travel for business purposes, you might receive travel allowance. This is usually paid on a monthly basis regardless of how far you’ve travelled. Your employer is required to withhold PAYE (pay as you earn) either from 20% or 80% of the amount based on how often you need to travel.
On assessment, the entire amount will be subject to tax, unless you have kept a logbook and complete the necessary details.
Mistake 3: Not claiming an exemption for remuneration earned abroad
Did you conduct business on behalf of your employer, outside of South Africa, for more than 183 days of the year, of which at least 60 days were continuous?
If so, the remuneration you earned for the work in the foreign country is not subject to income tax in South Africa. Your employer might have applied the exemption in South Africa, or it may still have withheld PAYE from your remuneration.
For more on expat tax and overseas earnings, read this.
Mistake 4: Not declaring medical dependants
If part of your medical aid is paid through payroll, your employer must consider the monthly medical tax credits before your tax is calculated for the month.
For the 2018/2019 tax year, the medical tax credits were:
- R310 for the main member,
- R310 for the first dependant and
- R209 for every additional dependant.
If your medical aid is not administered through payroll you might need to provide your employer with proof that you’re contributing to a medical aid in your private capacity. Make sure to list your medical dependents.
I’ll leave you with one more reminder to file your taxes by December 4, 2019.
SARS is on the warpath so it’s best to stay in their good graces.
[source:iol]
