7 Things To Remember This Tax Season

Make sure you’re paying only what you should be.

1. Insist on an IRP5

An IRP5 is a document prepared by your employer that states your total income and any deductions that have been made from your salary. This forms the basis of your tax return. The deadline for preparing an IRP5 is 31 May each year, so you should expect to receive yours at the beginning of June. If you do not receive an IRP5, it is a good idea to request one.

2. Know your investments

You should receive a IT3b or an IT3c from the financial institutions you invest with. These detail your interest, dividends, dividends withholdings tax and capital gains made during the year. Make sure you get a certificate from each investment and send it to your Tax Practitioner.

3. Claim from medical aid

SARS requires proof of out-of-pocket medical expenses, as well as proof of payment in the form of a receipt, bank statement or credit card slip. It is important to note that these must be in the name of the taxpayer and not the name of a spouse/parent.

However, your medical aid certificate includes a summary of all claims not paid by the medical aid which SARS accepts as proof. Therefore, claiming expenses from medical aid, even if they are not going to be paid can be a time saver later on.

4. Other income

It is an offence to not declare all your income. Therefore, if you are freelancing, renting out a property or earning any other income you need to keep records of all amounts coming in and out.

5. Sale of assets

Any sale of assets during the year gives rise to Capital Gains. It is therefore very important that if you sell anything – like a house or a car – that you inform your tax practitioner so he can declare it. There may not be any tax payable on the sale, but you still need to declare that it happened.

6. Statement of assets and liabilities

SARS is requesting a statement of assets and liabilities from certain taxpayers. It is vital that this is completed accurately where requested as if it is omitted, SARS can keep that assessment “open” indefinitely – which means they can go back and reassess you at any time in the future.

7. The loopholes are closing

We all have that one uncle who loves to brag about how he has never paid a cent in tax, or how he hides money in Belize and encourages you to do the same. Do not be fooled – we live in a very different age nowadays and the loopholes are closing. Under-declaration carries serious penalties, including financial penalties and even jail time. It is NOT worth it. If in doubt, declare.