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It is less than two weeks away from the tax year end on February 28.
All information up to this date will be included in your 2018/19 tax return, including all tax-deductions.
So, make sure you have taken advantage of all those tax perks before the end of the month.
Also remember to record your odometer reading for travel expenses and file all those expense claims and receipts.
TOP UP YOUR RETIREMENT FUND
You can invest up to 27.5% of your income (to a maximum of R350 000) tax-free into a retirement fund.
This is a great way to reduce your tax burden while securing your retirement.
Calculate by how much more you can top up your retirement fund to maximise your tax benefit.
You can add to either your company retirement fund or your retirement annuity.
Topping up in February is a great way for self-employed people to manage both their tax rates and retirement plan.
If you have a variable income, work out how much tax you will be paying in your February provisional tax return and invest in your retirement rather than the SA Revenue Service.
USE YOUR R33 000 FOR TFSA
You are allowed to save up to R33 000 each tax year into a tax-free savings account (TFSA).
Any interest, dividends or capital gains earned in a TFSA are exempt from tax. If you haven’t fully utilised this benefit, pay in a lump sum this month.
If you are opening a TFSA for the first time, don’t leave it too late as the administration may see you miss the tax deadline.
12J INVESTMENTS
If you have R100 000 or more to invest and you are looking for some tax relief, consider investing in a section 12J fund.
This is a tax incentive by government to encourage investment into certain sectors such as hospitality, student accommodation, technology, education and renewable energy.
Any upfront investment is fully tax deductible; however, the investment must be held for at least five years and incurs capital gains tax on exit.
There are several 12J venture capital asset managers including Westbrooke and Grovest. But do your homework first and make sure you understand the investment and the costs.
Don’t get caught up in the tax-saving hype. You don’t want to lose your money just to avoid tax.
ASSESS YOUR CAPITAL GAINS TAX
If you are planning on selling assets such as shares or unit trusts, by phasing the sale over February and March, you spread the capital gains over two financial years and benefit from the R40 000 capital gains tax exemption per tax year.
