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Firstly, you need to remember that the tax year you are currently submitting a return for runs from March 1 2015 to February 29 2016. The deadline by which you must submit will depend on whether you are a provisional taxpayer or a non-provisional taxpayer (see tax deadlines below).
A provisional taxpayer is anyone who receives income from more than one source. This could include freelancers, as well as someone who owns investment property and receives rental income.
You will have to submit a tax return if you earn more than R350 000 a year (before tax) and you are advised to submit as early as possible – the earlier you submit, the earlier you receive any refund due to you.
These are the tax deductions and exemptions you can use on your tax return:
INTEREST RATE EXEMPTIONS:
If you are younger than 65, you don’t pay tax on the first R23 800 of interest you earn. This threshold increases to R34 500 if you are older than 65.
PENSION FUND CONTRIBUTIONS:
You can claim back 7.5% of your retirement funding income or R1 750, whichever is the greater.
RETIREMENT ANNUITY FUND CONTRIBUTIONS:
You can claim back the greater of:
- 15% of your tax non-retirement funding income;
- R3 500 less your current deductions to a pension fund; or
- R1 750.
MEDICAL SCHEME CREDITS:
If you belong to a medical scheme, you qualify for the following tax credits: up to R270 for the main member, up to R270 for the first dependant and R181 for each additional dependant.
So, for example, a family of four could qualify for total medical scheme credits of R902.
Judy Snyman, fiduciary specialist at AlphaWealth, says you are also able to claim qualifying deductions for out-of-pocket medical expenses incurred during the year.
RENTAL INCOME:
“There are certain expenses you can deduct from income received from your rental property. This includes the interest portion of your bond if the property is bonded, levies, rates and taxes, insurance premiums, rental agent’s commission, repairs and maintenance costs, and bank charges,” Snyman says.
TRAVEL EXPENSES:
If you receive a travel allowance, you can claim deductions for business travel. You are advised to maintain a logbook, recording your odometer reading on March 1 every year and again on the last day of February the next year.
The purpose of the logbook is to keep a record of what mileage you covered for business purposes. You need to record the date of travel, the kilometres travelled and the reason of the trip.
You are required to keep each logbook on file for at least five years in case Sars chooses to call for a written record of your claimed mileage.
NO TAX RETURN REQUIRED
Ilsa Groenewald, associate director of tax compliance for BDO Durban, says you don’t have to pay tax if your total salary – earned between March 1 2015 and February 29 2016 – was less than R350 000. However, this is provided that:
- Dividends were paid to you as a non-resident during the 2016 tax year;
- You have only one employer;
- You don’t have a car allowance or any other passive income;
- You are not claiming any tax-related deductions such as medical, retirement annuities contributions or travel expenses; and
- Your interest income received from South Africa does not exceed R23 800 (for those younger than 65) or R34 500 (for those older than 65).
TAXTIM HELPS YOU DO YOUR TAX
If you are confused about how to do your taxes, TaxTim is a digital, interactive tax return assistant designed to help you complete and file your tax returns. TaxTim also highlights all possible deductions based on your tax profile.
The brainchild of inventor and programmer Evan Robinson, along with Marc Sevitz, a chartered accountant specialising in tax, TaxTim’s integration directly with Sars eFiling means that, once authorised, TaxTim can import your IRP5 data for easy completion and submit the completed return directly to Sars.
TaxTim has three tax return options, Lite, Smart and Ultra, accommodating all earners – from those with a basic salary, to freelancers, commission earners independent contractors or sole proprietors.
If you are a Momentum client, you’ll be pleased to know that Multiply members qualify for discounted sign-ups to TaxTim. Multiply members can get discounts of between 25% and 40% off TaxTim packages, reducing the basic cost of a package to R186.
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