How to tackle tax season

It’s just a few months away! Get ahead of SARS and handle your returns like a pro with this advice.

Another fiscal year ends this month – and we see you coming like in a thief in the night! Taxes are a serious game, and everyone wants to be a pro but aren’t always so clear on how to do it. So, here are five ways to prepare for tax season and ensure that you come out unscathed (and penalty-free).

1. Get your docs in a row

Gather all the documentation that you need to do your taxes. Improper preparation can result in capturing the incorrect information – which could then result in a fine, or worse. It’s understandable not to have your full wits about you if something has changed drastically since your last tax return, or if it’s your first time having to submit an income tax return.

Keep paper trails of every account and financial scheme that you contribute to. And if you’re married, know where your marriage certificates are.

2. Consult a tax practitioner

Most taxpayers need help from a professional – even those who insist that they don’t! SARS makes a number of refinements to their auto assessment process, meaning that they are more reliant on third-party data submissions.

Even if you don’t have a complex tax return, having a practitioner won’t hurt; you might be unaware of certain matters that could come back to bite you later – or, on the positive side, rebates you’re entitled to.

3. Get medical credits

Medical scheme fees tax credits are a non-refundable rebate that reduces the normal tax a person currently pays on their registered medical aid scheme.

These credits apply to each dependent on the medical scheme and the values depend on various factors. For example, the credits for a disabled child are higher than those for an able-bodied child.

4. Be savings savvy

Deposit your savings into an Individual Retirement Account (IRA) instead of a standard savings account. If you deposit money into an IRA – where interest accumulates tax-free – you’ll avoid paying tax on the interest. You could also be eligible to claim a deduction each year after a certain number of contributions.

5. Get ahead with eFiling

Are you a last-minute kind of person? SARS eFiling has your back. The website is free and allows taxpayers to submit returns and declarations, and other services.

Registration is free to all South African taxpayers, and you can do your taxes from anywhere, at any time. No need to put on a ‘presentable’ outfit or stand in any long queues.

Good to know

The year of assessment for taxpayers starts on 1 March and ends on 28 or 29 February the following year.
Tax season begins on 1 July every year.
Third parties include attorneys, banks, estate agents, financial institutions, medical schemes and more.
Tax practitioners must be registered with SARS and a recognised controlling body.
The tax credit on your medical aid scheme fees increases in line with your number of dependents on your scheme.
The Income Tax Act defines a disability as: “A moderate to severe limitation of that person’s ability to function or perform daily activities, as a result of a physical-, sensory-, communication-, intellectual or mental impairment, if the limitation: – has lasted or has a prognosis of lasting more than a year; and – is diagnosed by a registered medical practitioner in accordance with the criteria prescribed by the Commissioner.”

Words by: Sahrah Enous
Photographs: Shutterstock, Freepik