It’s Tax Time | Finances

Tax season can be a stressful time for many, but with the right preparation and knowledge, you can navigate tax time smoothly and efficiently. Here are our top tips to get you ready for the 2024 tax season.

1. Ensure you have a tax number and eFiling profile. If you don’t already have a tax number, it's crucial that you register for one as soon as possible. Additionally, set up an eFiling profile with the South African Revenue Service (SARS). 

2. Make sure your bank details are up to date on the SARS system. Incorrect bank details can cause delays in receiving any refunds due to you. You can update your bank details through your eFiling profile.

3. Check that your contact details, including your email address and phone number, are current. This ensures that you receive all communications from SARS.

4. Check your tax compliance before you file your current return, verify that all your past tax returns have been filed and that there are no outstanding penalties or tax debts. Any unresolved issues from previous years can delay the processing of your current return and potential refunds.

5. Decide whether to do it yourself or outsource to a tax specialist.  If you have multiple sources of income, such as rental income, investments, or a side business, your tax return can become complicated. A tax expert can help you navigate these, understand allowable deductions, manage business expenses, and ensure compliance with SARS regulations.

Consulting a tax expert can help you understand the tax implications of major life changes (marriage, divorce, having children, or retiring) and optimise your tax return accordingly.

A tax expert can also provide valuable advice on tax planning strategies to minimise tax liability. If you have outstanding penalties, disputes, or other issues with SARS, a tax professional can represent you and help resolve these matters efficiently.

On the other hand, if your tax situation is straightforward e.g., you have a single source of income from employment, you might be able to handle your tax returns yourself using the SARS eFiling system. This also applies if you are comfortable with the tax filing process and have filed your own returns in the past without issues, especially if there have been no significant changes to your financial situation.

Remember, you qualify for a 20% discount using either one of the Financial Well-Being Programme tax specialists - Tax Tim (use the voucher code: INTERFACE024) or Click here to speak to an Experity tax expert.

6. Have all your documents ready to significantly streamline the filing process. This includes:

• IRP5/IT3a: Issued by your employer or retirement fund, it details income and taxes paid.

• Medical Aid Certificate: Shows the contributions made to your medical aid.

• IT3b/IT3c: Documents reflect your investments and interest earned.

• Retirement Annuity Certificate: Shows proof of contributions made.

• PBO Certificate: For any donations made to public benefit organisations (PBOs).

• Travel Logbook: Required if you claim business travel expenses.

7. Report retrenchment or retirement fund withdrawals. If you were retrenched, withdrew or transferred funds from your retirement account, ensure that these transactions are included in your tax return using the IRP5/IT3a form provided by your employer or fund. Omitting this information can delay your assessment and refund.

8. SARS may issue an auto-assessment based on the information they have on file. If you have been auto-assessed, you will receive an email or SMS notification by mid-July and it means SARS feel they have enough information to assess you without you having to submit a return.  You must either accept the auto-assessment or reject it and complete your own tax return.  Auto-assessments do not include deductions like travel expenses, donations, and home office expenses; so, in some instances, it may be preferable to submit the return yourself. Regardless, you are responsible for checking the auto-assessment to ensure the information is correct and complete and that you are not missing out on claiming any deductions and maximising any possible tax refund.

9. To claim home office expenses (if applicable) you must meet specific criteria:

• An employer’s letter confirming that you work from home.

• Spending more than half of your working hours in your home office.

• A dedicated room in your home is used exclusively for work, with evidence such as photographs and floor plans.

• The office must be equipped with the necessary tools and equipment for your job.

• If you do not meet all these requirements, do not claim home office deductions, as SARS is very stringent in verifying these claims.

10. Diarise dates and plan to meet the tax deadlines early so you avoid last-minute stress and potential delays. Here are the important dates for 2024:

• Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024

• Auto-assessment notices: 1–14 July 2024

• Provisional taxpayers: 15 July 2024 to 20 January 2025

• Trusts: 16 September 2024 to 20 January 2025

By following these tips and preparing in advance, you can ensure a smoother tax filing experience and potentially expedite any refunds due to you. Happy filing! Click here to access financial well-being guidance on tax returns if you need assistance.