Haven’t filed your tax return yet? Here’s how to avoid mistakes

It is tax season, which suggests it’s time for taxpayers to emphasize about getting their tax return proper to make sure they don’t pay an excessive amount of tax or too little and perhaps, simply perhaps, get just a few rands again from Sars.

This yr, Sars’ tax techniques and officers are anticipated to be extra environment friendly and centered on gathering income, which suggests you should be positive you included all the pieces in your return, tax supervisor at Allan Gray, Meagan Fraser, says.

“For the majority of South Africans, the reversal of the proposed 0.5% VAT increase earlier this year provided a sense of relief in terms of their monthly budgets. However, the loss of the anticipated revenue from this proposed increase resulted in a R75 billion shortfall in the national budget.”

This, she factors out, resulted in a renewed drive on the a part of Sars to make sure that excellent taxes are precisely and effectively collected. “Its efforts during tax-filing season will therefore be focused on taxpayer compliance and collecting outstanding taxes.”

ALSO READ: Common pitfalls to keep away from this tax season

However, she says, this doesn’t essentially imply you’ll pay extra tax.

“Sars cannot collect more tax from you than you owe. As a taxpayer, you have the right to consistent and impartial application of the law, but you also have the obligation to submit your return with complete and accurate information to Sars on time.”

How to ensure your auto-assessment is right

However, not everybody has to submit a tax return. If you earn beneath R500 000 a yr and don’t have any deductions and just one employer, you might be exempt from submitting a tax return. According to Sars, 5.8 million taxpayers are auto-assessed this yr, which suggests they don’t have to arrange their very own returns.

However, she warns that you need to nonetheless fastidiously examine the evaluation. “Sars makes use of the information they obtained from employers, monetary establishments and medical help schemes to pre-populate quantities on behalf of taxpayers.

“The intention is to improve the accuracy and verifiability of the amounts completed on returns and to assist Sars in issuing estimated assessments for taxpayers who have relatively simple tax affairs.”

Fraser says if you happen to have been auto-assessed, Sars will notify you by way of SMS or e mail. “It is as much as you to make sure that the knowledge Sars utilized in your return is correct and full by cross-checking it in opposition to the tax certificates your service suppliers issued.

“If you disagree with any amounts Sars used, you must query the amounts directly with the relevant third-party data providers and request that they resubmit the corrected information to Sars.” This can be quantities equivalent to your wage and medical help funds.

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If you’ve gotten any further revenue or deductions not included in your return, you’ll have to add the related data manually.

If you settle for your auto-assessment, Sars can pay you any cash it owes you inside 72 hours.

Getting your tax paperwork prepared

If you aren’t auto-assessed, it’s a must to full your tax return. The first step is to get your tax paperwork prepared. Fraser says this embody an IRP5 out of your employer, an IT3(b), IT3(c), IT3(s) and a retirement annuity fund contribution certificates out of your funding supervisor, your medical scheme tax certificates and proof of qualifying medical bills, in addition to paperwork associated to any rental properties.

“Remember, you are required to keep copies of all supporting documents for five years from the date of submitting your return, as Sars may request these documents to verify the information you declared.”

ALSO READ: Tax season: Here is why that you must prioritise submitting for returns

With tax season in full swing, Fraser urges taxpayers to not wait till the final second to submit their return to keep away from incurring penalties. “It is important to ensure you comply by filing your income tax return accurately and by the set deadline, as well as settling any outstanding taxes in full and on time.”

Most frequent error taxpayers make

Adriana Taljaard, an accountant from AT Accounting & Taxation Solutions, who works with Procompare, a web based platform that connects South Africans with native professionals, says essentially the most frequent error taxpayers make is forgetting so as to add their medical-aid deductions.

Procompare’s evaluation of hundreds of requests for accountants reveals a key taxpayer problem: Sars auto-assessments exhibits these key insights:

• 1 in 6 taxpayers want skilled assist: 17% of particular person tax requests on its platform have been for auto-assessments.
• Top errors: Missing medical help deductions, duplicate IRP5s and undeclared side-hustle revenue.
• Cost of correction: The common charge accountants cost to repair these errors is R800.
• Quick turnaround: Most points are resolved in 2–5 working days as soon as paperwork are supplied.