Avoid Tax Tension This Filing Season

Tax filing season opened on Friday, 1 July, leaving many income-earners anxious. Among the concerns are the prospect of searching for misplaced documents and forgotten receipts, uncertainty about which tax deductions to claim, and how to avoid mistakes that could result in refund delays – or worse, penalties.

The SARS auto-assessment process offers some relief for those whose tax affairs are relatively straightforward – for example, company employees with a single source of income. Three million non-provisional taxpayers form part of this process this year, and they will not have to file a tax return if SARS is satisfied with the outcome.

The assessments are compiled by SARS using data from employers, banks, medical schemes and others. The assessments are returned via eFiling or the SARS MobiApp.

If you agree with the assessment, and a refund is due, you should receive this payment within 72 hours. If you owe SARS money, you can pay via eFiling or the MobiApp.

Should there be a data error, or incomplete information, you can correct this by asking the relevant institution to send updated details to both you and SARS. You can also file a tax return as normal, with the additional information, within 40 business days of the assessment outcome.

• Read on what happens if you don’t pay your tax.

Changed tax status

Many people’s work status has, however, changed or become more complicated since the previous tax filing season. Thousands of people have been retrenched, changed jobs, become self-employed, left South Africa, or taken on freelance work in addition to their regular job. Their personal status may also have changed due to marriage, divorce, or parenthood.

• Find out about the tax implications of marriage.

Shafeeka Anthony, marketing manager of personal finance website JustMoney.co.za, says, “In general, it’s worth contacting SARS, your accountant, or a reputable tax practitioner if you are unsure about your changed tax status. This ensures that you get up-to-date advice tailored to your particular situation.

“A professional’s fee could be covered by the tax savings, and you will also enjoy greater peace of mind.”

Before choosing a tax practitioner, shop around and ask the following:

• With which professional body are you registered?
• What are your fees, and what do they cover?
• Can you help with objections and appeals if I disagree with the SARS assessment? If so, what do you charge for this?
• Do you allow clients shared access to their eFiling profiles? (This allows you to receive SARS communication and hold the tax consultant accountable.)

Tax admin and savings tips

To handle your tax efficiently, you need to be organised, retain your personal and business documents, and store these securely, notes Anthony.

Business records: Depending on the type of work you perform, you may be able to claim costs relating to your cell phone, rent, rates, electricity, accounting and tax fees, IT, your vehicle, and any other income-related goods and services. You can only claim the usage that relates to your work, so receipts and records are important. You could save time and trouble by using a cloud-based accountancy package.

Remote work: If you’re a South African taxpayer or tax resident, you are liable for tax on your worldwide assets and income. Whether you work in South Africa or another country, you need to report your earnings to SARS and pay tax accordingly. At the same time, any other country in which you earn income can also levy tax.

• Read how to avoid being double-taxed.

Personal bills: You will need proof of items such as medical bills and interest earned on investments to be eligible for claiming against these. Even if you don’t need to submit supporting documentation, you must retain it for seven years. SARS will need to see these items should they query a submission or perform an audit.

Tax savings: There are many ways to reduce your tax bill, from contributing to your retirement and investing in your children’s education, to supporting your favourite charity, provided it is appropriately registered.

Fraud alert: Tax fraud is on the rise. Scammers may pretend to be a SARS official and ask for your confidential details. Fraudsters may also falsely inform you that you are under audit, or they may make an unauthorised change to your eFiling profile, using information obtained by phishing.

Ensure that SARS has your up-to-date contact details, and if you receive a request, find out what it relates to before acting on it. It could be a phishing email, SMS or phone call.

“Finally, remember to file on time,” says Anthony. “Go through your papers timeously to pick up any inaccuracies, missing documents or outstanding information ahead of the filing deadline.

“Punctual submission avoids a financial penalty, or triggering an alert with SARS. Knowing your affairs are under scrutiny, and only then sourcing documents, is time-consuming and stressful. Avoid this by planning ahead and getting organised.”

Income tax return filing dates are as follows:

1 July 2022 to 24 October 2022: Non-provisional taxpayers who file online, and taxpayers who cannot file online and have an appointment with a SARS branch.

1 July 2022 to 23 January 2023: Provisional taxpayers.

• Check out the SARS website here.