How to fill in your income tax return
DO YOU HAVE TO SUBMIT A RETURN?
If you earn under R250 000 for a full year from one employer (total income before tax), receive no travel allowance and have no additional income that you need to declare or deductions for which you want to claim, you do not have to submit an income tax return to the South African Revenue Service (SARS).
1. CHOOSE A WAY TO SUBMIT
If you do have to submit an income tax return, you must decide how you will do so. You have three options:
1. eFile online;
2. Go to a SARS branch, where a consultant can help you to submit a return electronically; or
3. Submit your paper return by post or deposit it in a drop box at a SARS branch.
Why queue if you can eFile?
If you want to eFile your income tax return, your internet browser needs to be up to date. Adobe Flash Player version 10.3.0 and upwards is recommended for the Flash forms and Adobe Reader 9 and upwards is recommended for the PDF documents. If you do not have these programs, or an up-to-date version of them, you can download them from www.sarsefiling.co.za for free.
Alternatively, you can download the SARS eFiling App to complete and submit your ITR12 from your mobile device. You need an Android phone or tablet, or an Apple iPhone 4, 4s, 5 or higher, or an iPad2 or higher to use the SARS eFiling App. Visit either the Google Play Store (for Android) or the App Store (for Apple devices) and download the SARS eFiling App for free.
Before you can eFile for the first time, you have to register for eFiling. In order to register, you will need your income tax registration number, your identity number and your bank account details.
Go to www.sarsefiling.co.za, click on the “Register” link and follow the online instructions. You will have to choose the initial part of your log-in name and a password. SARS will add a four-digit number to your log-in name during the registration process. You should be able to eFile immediately.
If your tax registration number is not accepted, you will have to call the SARS contact centre on 0800 00 7277.
To start eFiling, go to www.sarsefiling.co.za and log in with your log-in name (including the four-digit number) and your password. If you have forgotten your log-in name or password, on the log-in page follow the link “For a reminder of your username or to reset your password click here”. You will be asked for some of your details and sent your log-in name or password by SMS or email if you have provided SARS with these contact details.
After logging in successfully, you will be taken to the income tax work page. This page will tell you if SARS has issued you with a return. You can open your return by clicking on the “ITR12” link. If no income tax return shows on this page, it means the registration process has not been finalised. You will have to telephone the SARS contact centre to resolve the problem.
As you open the income tax return, you will receive a message that tells you that a return has been generated for you using the latest IRP5/IT3(a) information that SARS received from your employer/s.
It warns that your tax return may be incomplete if your employer has not yet submitted all your information to SARS. Everybody receives this message, because SARS might not have received all your certificates from your employer/s. It is up to you to check that the relevant employer-related information has been filled in.
If you need help with eFiling, you can click the “Help-You-File” icon and follow the prompts to access an agent at the SARS Contact Centre. If you give your permission, agents can shadow you while you are logged on to see what you are doing on the screen and to give you guidance. They cannot, however, see your bank details.
Create your electronic return
The first step in completing your return is a standard questionnaire that determines the fields of the return that are relevant to you. If you have eFiled before, the questions will already be answered, but you can amend them if you need to when you begin filling in your return or at any stage while you are completing it.
Submitting at a SARS branch
All you need to do is take proof of your identity and your supporting documents with you. The SARS consultant will help you to fill in the income tax return, and you will sign your return electronically on a signature pad.
If you want to submit a paper return, note that the deadline is Friday, September 26. You need to request the return from SARS. Speak to a SARS agent at a SARS branch or telephone the SARS contact centre to have it posted to you. You will need to answer certain questions so that the agent can create a personalised income tax return (ITR12) for you.
Your paper ITR12 return should be pre-populated with information printed in pink ink.
If the pre-populated information is correct, you do not have to do anything other than sign your return and submit it to SARS.
USING A TAX PRACTITIONER
* All tax practitioners must be registered with a recognised controlling body, as well as with SARS. Ask your tax practitioner for their tax practitioner number. This can be verified on the SARS or eFiling websites.
* A person who is not registered with a controlling body and who prepares your tax return may not charge you for their services and may not submit the return on your behalf.
* If either a tax practitioner or someone else helps you with your return, the responsibility rests with you to file your return accurately and on time.
2. MAKE SURE YOU HAVE WHAT YOU NEED
You will need the information on your supporting documents to complete your return. Use your documents to check that the prepopulated information on your return is correct.
You need the following supporting documents:
* Your bank account details.
* Your IRP5/IT3(a) certificate from your employer.
* Your IT3(a) from your pension or retirement fund and your IT3(b) (investments, capital gains and financial statements) certificate(s) that you (and your spouse, if you are married in community of property) received for interest income earned.
* Financial statements that reflect any business income you earned.
* The certificates for retirement annuity contributions you made.
* Information that relates to any capital gains you have made.
* Documents that relate to medical expenditure, such as a statement from your medical scheme at the end of February and proof of medical claims not paid by your scheme.
If you or a member of your family is disabled, you will also need a completed “Confirmation of diagnosis of disability” form (ITR-DD) (refer to step 8).
* If you receive a travel allowance, the details to calculate your travel claim – that is, your odometer reading at the beginning and at the end of the tax year, and details of your business travel and/or costs.
* Any other documentation that relates to income that must be declared or deductions that you want to claim.
Remember that even though you do not have to submit any documents with your income tax return, you must keep them for five years after submitting the return.
3. CHECK YOUR PERSONAL DETAILS
The second page of the income tax return is for all your personal details.
Much of this section should already be pre-populated with your details.
Don’t forget to state whether you are not married, married in community of property or married out of community of property.
If you are married in community of property, you need to supply your spouse’s identity or passport number and his or her initials. This will enable SARS to identify the spouse who earns the other half of any interest or rental income you declare or who has made half of any capital gains you declare on your income tax return.
Finally, check that your bank account details are still correct.
To avoid fraud and theft, SARS pays refunds electronically only into verified cheque or transmission/savings accounts held in the name of the taxpayer (no third-party accounts) at a registered South African financial institution.
If you need to change your bank account details, you can do it in person at any SARS branch, or if you are registered for eFiling, when you are completing and submitting your ITR12.
* To protect you against fraud, any changes that you make to your banking details will be verified by SARS before updating your banking profile. Any refunds due to you will be processed after your banking details have been verified.
* If the SARS validation fails, you will be requested to visit a SARS branch. Take valid personal identification, a bank statement with the original bank stamp less than three months old and proof of residential address with you.
* SARS will not pay a refund into an account of a third party.
4. CHECK YOUR SALARY DETAILS
The next page of your income tax return records information about your salary and the tax and deductions made from it. This section should already be filled in for you.
Check your employer details and the entries in the “Income received” section against the relevant codes on your IRP5/IT3(a) certificates.
If you want to check what kind of income is being declared, but do not know what the codes stand for, refer to the “Comprehensive guide to the ITR12 return for individuals” on the SARS website.
If any income or benefits that you have received from an employer or a pension fund and the tax deducted are not recorded, you can either fill in the information yourself or, if you are eFiling, ask your employer to up date the information it submitted and then try again later after using the “Refresh IRP5 data” button on the income tax work page to update your return.
5. DECLARE YOUR INVESTMENT INCOME
All investment income must be declared, including local dividends that may have been subject to a withholding tax.
Check the IT3(b), etc certificates you have received from banks, life assurance companies and unit trust companies, because these will state the interest you have earned from your investments.
If you received interest on local or rand-denominated foreign investments from more than one investment or financial institution, add the amounts together and enter the total on your tax return.
Similarly, foreign interest income and foreign dividends that you have received must be converted to rands and the amounts added up before you enter the total on your income tax return.
Do not deduct the amount of investment income that you are entitled to receive tax-free in terms of the exemption on investment income (R23 800 for the 2013/14 tax year if you are under the age of 65 or R34 500 if you are 65 years and older). SARS' will deduct these amounts for you.
If you are married in community of property, you need to enter the total amount of local or foreign interest income or foreign dividends that you and your spouse have earned. SARS will deduct these amounts for you.
6. DECLARE YOUR CAPITAL GAINS
You have to perform this step only if you made any local or foreign taxable capital gains or losses.
Each transaction that results in a capital gain or loss must be declared separately.
Consult the “Comprehensive guide to capital gains tax” on the SARS website (see “If you need help”, below).
If the gain was made on a primary residence, you can enter the primary residence exclusion, currently up to R2 million, and SARS will deduct this when they calculate the capital gain you made.
Do not deduct the annual exclusion, R30 000 in the 2013/14 tax year, because this will be done by SARS.
You need to record your gain even if it is less than the exemption. Also, if you made a capital gain and are married in community of property, do not split the gain. SARS will do this for you.
7. ANY OTHER INCOME
Skip this step if you earned only salary, pension or investment income. If, however, you earned business or professional income or rental income, you need to fill in the “Local business, trade and professional income (including rental income)” section.
If you ran a business in your own name, enter the details about your turnover, cost of sales, gross profit or loss, expenses (excluding personal expenses) and adjustments, such as those for depreciation and doubtful debts. This must be substantiated if required.
Finally, work out your taxable profit by deducting the allowable expenses and adjustments from your gross profit. If you earned rental income or professional fees, follow the same process but enter the income earned as “Income other than turnover”.
If you received any other taxable income or accruals, such as royalties, you need to declare these in the “Other taxable receipts and accruals” section of the income tax return.
You may have received income that is not taxable in South Africa, such as income you earned while working outside the country for qualifying periods. This income must be declared in the “Amounts considered non-taxable” section of the income tax return.
8. RECORD YOUR ANNUAL MEDICAL EXPENSES
If you paid your own medical scheme contributions and/or had any medical expenses that you did not recover from a medical scheme, the medical deductions section is the place to record this information.
However, if your employer paid medical scheme contributions on your behalf and/or deducted medical scheme contributions from your salary, this information should already have been recorded with your other salary details (refer to step 4). You must not repeat that information in this section.
The field in which you need to “State any medical scheme contributions made by yourself and not reflected on your IRP5/IT3(a)” next to the code 4040 should be filled in only if you paid your own contributions, for example, by debit order. Put a “0” in this field if your employer paid your contributions or deducted them from your salary.
Whether you paid your own contributions or your employer paid them on your behalf, with or without a subsidy, you need to record how many dependants you had listed on the scheme in each month of the tax year. SARS requires this information to calculate how much of your contributions you are entitled to claim as a rebate or deduction. Note that if the number of dependants is below 10, it should be written as 02, 03, 04, and so on.
As long as your medical scheme registered a member of your family as a dependant, you can claim a deduction for contributions paid for that relative.
So, for example, if you are the principal member and your spouse and one child were registered on the scheme as dependants for the first three months of the tax year, you need to enter the number of members on your income tax return as three for the first three months. If, in the fourth month, you had a second child and registered him or her on your scheme, record the number of members for the rest of the year as four.
You are also entitled to claim a deduction for certain medical expenses that you paid for yourself, your spouse, child or member of your immediate family to registered medical practitioners, for medicines or to facilities such as nursing homes and hospitals, and that you were unable to recoup from your medical scheme.
If you submitted all your medical expenses to your scheme, you will be able to determine your unrecouped medical expenses from the statement you received from your medical scheme.
The income tax return distinguishes between three kinds of unrecouped medical expenses:
* Medical expenses not related to a physical impairment. These should be entered in the field “State any medical expenses not recovered from your medical scheme (other than physical impairment or disability expenses)” (code 4020).
* Unrecouped medical expenses related to a physical impairment – a short-term or mild physical impairment.
These expenses should be entered in the field “State any physical impairment expenses not recovered from your medical scheme” (code 4022).
* Expenses related to a disability that you or a member of your family may have – for example, if you or one of your dependants is deaf or blind or requires a wheelchair as a result of a permanent disability. These expenses should be entered in the field “State any disability expenses not recovered from your medical scheme” (code 4023).
Record all qualifying expenses, and SARS will calculate what you are entitled to receive as a rebate or deduction. If you are 65 years and older, all qualifying medical expenses in the above three categories will be allowed.
No limitation will be placed on the medical expenses that you actually incurred if you are 65 years of age or older, or if you, your spouse or child is considered a person with a disability as defined by SARS.
If you, your spouse or your child have a physical disability, all your unrecouped medical expenses should be allowed, as well as unrecouped medical and other expenses related to the disability.
To claim a tax deduction for all medical and other expenses because you or a member of your family is disabled, the impairment needs to be one that moderately or severely limits you or your family member's ability to function or perform daily activities after treatment or therapy.
In order to claim expenses related to a temporary or permanent disability, you have to ask your doctor to fill in a “Confirmation of diagnosis of disability” form (ITR-DD form), which you can print out from the SARS website, www.sars.gov.za. This form has to be signed by a duly registered medical professional.
If your, your spouse’s or your child’s disability is temporary, your doctor will have to complete the form once a year. If your, your spouse’s or your child’s disability is permanent, your doctor will have to complete the form every five years. You don’t have to submit this form, but you must have it in case SARS asks you to submit it.
SARS has published a list of the qualifying expenses you can claim, which emphasises that the expense must be related to the disability. For example, you can claim for modifications to a car that you require as a result of a disability, but not for the car itself.
DON’T LIE ON YOUR RETURN
Overstating the number of dependants and expenses for medical claims is a criminal offence.
* Only claim for the actual number of dependants registered on your medical scheme.
* Don’t overstate your out-of-pocket medical expenses, because SARS can ask for your receipts.
* You can claim only for prescribed medication.
9. RETIREMENT ANNUITY AND INCOME PROTECTION PAYMENTS
If you contributed to a retirement annuity (RA) fund, you have to state this in the online questionnaire or when you request an income tax return. Then you need to declare these contributions on your return in the section headed “Retirement and income protection contributions”.
Even if you contributed to an RA through an employer and the information is recorded with your other salary details, you must fill in this section to qualify for a tax deduction.
Use the amount on the certificate that you received from the institution to which you made the contributions, or if you contributed to more than one RA fund, add up the amounts on each certificate.
Any contributions to an RA that exceed the amount you are entitled to deduct will be carried forward to the next tax year as contributions. You can claim only contributions made in your own name as a member of an RA fund and not contributions made on behalf of your spouse or child.
If you paid premiums on a policy to protect yourself against loss of income as a result of illness, injury, disability or unemployment, you should receive a certificate from the institution to which the contributions were made.
Fill in the amount you paid in the section of tax return headed “Retirement and income protection contributions”.
10. CLAIM BUSINESS TRAVEL EXPENSES AGAINST AN ALLOWANCE
If your employer pays you a travel allowance because you use your vehicle for business purposes, it will be reflected on your IRP5. If you used more than one vehicle during the year for work purposes, you should have stated this in the online questionnaire. Your return will then accommodate details for all the vehicles.
The first question you need to answer is “Did you use a log-book to determine your business kilometres travelled?”
You may claim only mileage recorded in a log-book against your travel allowance, so you should have a log-book that records your business trips.
Remember that travelling between your residence and your place of employment and vice versa is considered private, not business, travel.
You also need to fill in your vehicle’s registration number and its cash value or cost price.
The cost price or cash value of your vehicle is the price, including VAT, that you paid for it when you bought it, excluding any interest you have paid on a vehicle financing arrangement. You also need to provide the make and model of the vehicle and its year of manufacture.
Next, you need to tell SARS whether you used your vehicle for business purposes for the entire tax year, or less. For example, if you used the vehicle for the whole tax year, fill in the “Starting date” as March 1, 2013 and the “Closing date” as February 28, 2014. In the fields on your return marked “Opening kilometres” and “Closing kilometres” you need to fill in the odometer reading on your vehicle at the start of the tax year, or when you started using your vehicle for work purposes, and the reading at the end of the tax year, or when you stopped using your vehicle for work purposes.
The “Opening kilometres” should be the same as the “Closing kilometres” you declared on last year’s income tax return if you received an allowance last year and did not change vehicles at the end of the tax year. If you eFiled last year, you can look up your closing kilometres from last year’s income tax return by going to the “Return history” link on the left-hand navigation bar. You should have access to all the income tax returns you have eFiled.
The online income tax return will calculate the total mileage for the tax year (“Total kilometres”) for you.
In the “Business kilometres” field, fill in the actual mileage you travelled for work purposes as recorded in your log-book.
If you have accurate records of everything you spent on your vehicle during the tax year, you can enter your actual expenses for fuel and oil, maintenance and repairs, licensing, insurance, wear and tear, and lease payments. Alternatively, you can leave these fields blank, and SARS will use the fixed scale of costs to calculate your claim against your allowance. You do not have to calculate the amount that you will be allowed to deduct from your taxable income as a claim against your travel allowance. SARS will work out the amount for you.
11. CLAIM ANY OTHER DEDUCTION
There are only a few other deductions that you are entitled to claim from your taxable income if you earn a salary. These deductions include those for:
* Claims against a taxable subsistence allowance you are paid if you are obliged to travel for business purposes and spend nights away from home;
* Donations made to an approved public benefit organisation in terms of Section 18A of the Income Tax Act;
* Depreciation of an asset, such as a computer, that you have to use for work purposes; and
* Home office expenses if you use part of your home regularly and exclusively as an office.
If you want to claim any of these expenses, consult the “Comprehensive guide to the ITR12 return for individuals” (see “If you need help”, below).
DON’T HIDE IT. SARS WILL FIND IT!
SARS is closing in on undeclared income and overstated expenses.
* Declare all the income you received during the year of assessment, such as rent, interest and income from your part-time job.
* If a deduction does not exist, do not claim for it!
MAKE ACCURATE CLAIMS
Make sure you have the correct documentation and proof for every claim you make.
* Use only information and figures that reflect on your supporting documents
* Use only the amounts reflected on your contribution certificates from your retirement annuity fund, income protection scheme, and so on.
* Make sure you keep an accurate logbook and do not fabricate kilometres travelled.
* Don’t inflate the value of your vehicle.
* If you are found to have made inaccurate claims, you will be penalised.
12. CHECK YOUR POSSIBLE ASSESSMENT
If you are eFiling, there is a quick way to check the possible outcome of your assessment (what you owe SARS or what SARS owes you).
You need to click “Save return” and then use the “Tax calculator” button. This will generate a tax calculation that will give you an idea what your assessment will look like and whether you will have to pay SARS more tax, whether SARS will refund you, or whether you have paid the right amount of tax. The calculation is an estimate and does not guarantee that you will receive a refund.
Refer to your Notice of Assessment (ITA34) to see whether you will receive a refund.
13. FILE BEFORE THE DEADLINE
To submit your electronic income tax return, open it and click on the “Submit return to SARS” button. If you have forgotten to fill in something that you should have on the electronic return, you will now be prompted to do so.
Remember, however, that if you did not answer the questionnaire on the first page of the income tax return correctly and have not added the relevant sections to your return, SARS’s systems will not be able to prompt you to correct that error.
Once you have hit “Submit return to SARS”, you should receive a message confirming that your tax return has been filed.
If you are eFiling or visiting a SARS branch to submit your income tax return electronically and you are not a provisional taxpayer, you have until Friday, November 21, to submit your return. If you are a provisional taxpayer and intend to eFile your income tax return, your deadline is Friday, January 30, next year.
If you are filing a paper return, you need to post it in the self-addressed postage-paid envelope supplied by SARS or drop it off at a SARS branch by Friday, September 26.
(If you are posting your income tax return, it must be in a mail box by that date.)
14. GETTING YOUR FINAL ASSESSMENT
Once you have submitted an income tax return, it will be assessed by SARS and you will be sent a “Notice of assessment” (ITA34) either to your eFiling profile or via the post. This notice will state what you owe SARS or what SARS owes you by way of a refund and how SARS calculated this amount, including what deductions (if any) SARS allowed or disallowed.
The average turnaround time for the assessment of income tax returns submitted electronically is just 48 hours (assuming your return was completed correctly and honestly), while assessments of paper returns take about two months.
You can check on the status of the processing of your return on your income tax work page if you submitted the return via eFiling.
If you want to know the status of a return that you submitted manually, you may contact the SARS call centre on 0800 00 SARS (7277). SARS may inform you that it wants to investigate your return further or ask to see your supporting documentation. If you receive an assessment and you do not agree with SARS’s calculation, and you can see that a mistake has been made (such as a simple typing error that transposed digits), you need to complete and submit a “Request for correction” form – available online from your income tax work page or at a SARS branch, or you will have to telephone the SARS contact centre for advice.
If all the information is correct but you disagree with what was allowed or disallowed on a matter of interpretation of the Income Tax Act, you can lodge a “Notice of objection”.
BEWARE OF SCAMS
SARS will never request your banking or personal details in any correspondence that you receive via post, email or SMS. Note that the SARS website does not have links to any banks, nor will SARS send you hyperlinks to any other websites, including banks.
IF YOU NEED HELP
* For questions on how to fill in your tax return, look at the guides that SARS has prepared for you. Go to www.sars.gov.za and type the name of the relevant guide in the search field. Useful guides are: “Comprehensive guide to the ITR12 return for individuals”; “How to eFile your personal income tax return”; and “Comprehensive guide to capital gains tax”.
* If you need help while eFiling, you can click the “Help-You-eFile” icon and follow the prompts to reach a SARS contact centre agent.
* Telephone the SARS contact centre on 0800 00 SARS (7277).
* Visit your nearest SARS branch.
This guide was compiled by the South African Revenue Service and Personal Finance.