Tax season starts on 7 July for the tax year ending on 28 February 2023. For most of us, it’s a confusing time when we hope we did everything right and that we won’t be penalised for something we probably don’t understand! Let’s have a chat about some of the most common concerns about tax.
Do it online
Gone are the days of waking up at 4am to stand in the queue at SARS. To make tax season easy for you and your tax guy (if you have one), make sure you’re registered for eFiling if you need to submit a tax return. SARS has a landing page with answers to most questions you might have about this – go take a look.
Use 22seven to simplify your life
Use the date range filter on the Transactions/Tracking page to set the dates for the tax year. This will show you all your income and expenses within the timeframe. You can even filter it per category to see a summary of specific expense types, like commission earned, donations etc. When it comes to medical aid, you can create a custom category for your medical expenses to help you work out how much you can deduct without scrambling through doctor’s e-mails and receipts. You can even export your 22seven data to a spreadsheet and send it to your tax guy, which makes their job so much easier and more accurate. Check out our How to use 22seven to rock your tax return article for more tips and tricks.
Don’t pay more than you have to
There are lots of ways that you can pay less tax – we’ve covered them extensively in the past. A retirement fund, for example, comes with three important tax benefits: your contributions are tax-deductible; the returns on your investment are tax-free; and when you retire, you can withdraw a lump sum without paying tax (up to a limit and subject to certain rules). Read our Slice on this topic so you don’t miss out. A tax-free savings account (TFSA) is another great way to save. If you invest in a traditional investment product like a unit trust account, you pay tax on any growth within the investment. Not so with a TFSA: you get to keep all the earnings without giving any of it to SARS.
What about provisional tax?
If you have a side hustle or earn income outside of your 9-5 job, you might be required to pay provisional tax – when you pay SARS smaller amounts two or three times a year instead of once a year. This is sometimes also a better tax arrangement for freelancers, or if you have your own business. Provisional tax can get complicated – make sure you know whether you’re supposed to be paying it so that you don’t get penalised.
Know what you’re looking at
Ah, tax certificates. What on earth do all the codes mean? Here’s a brief description of the most common types you might need to request, or that your employer or broker might send to you.
Don’t stress! If you’re employed by a company and you don’t have a trust fund (if only!) or any side projects, tax season is relatively simple. You’ve probably paid all the tax you need to pay already and you just need to file your return. But if your work situation is more complicated, you might need to spend some time on the SARS website or enlist the help of a professional. Good luck, and fingers crossed you get some money back!