OPINION: How to ace your income tax return
Recent media headlines announced that Sars reported a revenue shortfall for 2018/19, making it the fifth shortfall year estimated at R57.4billion less than the original mark. Tax season is open and the revenue services will without a doubt try to reach its collection target. South African taxpayers have until end October to file their individual personal returns. For outstanding returns, penalties range up to R16000 a month for higher-earning taxpayers and individuals have been convicted and sentenced in the past for failure to submit.
Taken from my book Tips, Tricks and Checklists from a Tax Practitioner, here are five simple steps to help ace your Sars income tax return this season:
Get your act together: Taxpayers have to collect a number of different documents to substantiate and inform their tax calculations and submissions. These documents are not the same for every taxpayer and should be collected from various sources, such as medical aids, banks and suppliers before the income tax submission can be started.
One Sars step at a time: Complete Section 1 and 2 of the tax returns. It is important to understand the reason for the questions and how these apply to you before populating the answers. For example, a question regarding how the taxpayer is married and the options include “in community of property” and “outside community of property”:. Because tax on passive income is calculated differently for taxpayers depending on whether they are married in or outside community of property, selecting either one of the options will result in a very different result for the taxpayer.
Show me the money: Section 3 of the tax return involves inputting the figures that inform the calculations of the tax submission. ensure that the calculations of the tax return are accurate, valid and complete.
Navigate and know where you are going: Navigating the e-filing profile becomes the next challenge for the taxpayer. save, submit and view the outcome of the tax return. There are four pieces of information the taxpayer must be able to obtain and save for future records. These are the Statement of Account (Itsa), Admin Penalty Statement of Account (Apsa), Income Tax Assessment (IT34) and Income Tax Return (IT14) and there is a different menu path to follow on e-filing to obtain each of these documents.
Avoid the audit process: If you have been subjected to a Sars audit it’s easy to understand how agonising this experience can be. Now imagine if Sars could make you pay for the resources it had to spend in putting you through this trial. The harsh reality is, it can. When you submit, do it right and don’t rush.
On the opposite side of the scale, not everyone needs to submit an income tax return. Individuals do not have to submit areturn if their total employment income for the year is less than R350 000.
For more information about tax deadlines, view Sars’s own advice sheet, or find your nearest Sars branch, or contact the call centre at 0800007277.
Nestene Botha is local author of Tips, Tricks and Checklists from a Tax Practitioner and managing director of AuditPRO.