The war in Ukraine has backtracked the fragile economic recovery from the pandemic, triggering a devastating financial crisis on consumers, increasing food and commodity prices and globally exacerbating inflationary pressures, says the latest United Nations forecast released recently..
While we are facing the harsh reality of this economic fallout, it is also important to revisit critical long-term investment goals, take stock, and figure out how to get back on track.
It might sound a little bit too much since the economic fallout of the war spells greater transfer pricing risks and higher taxes, but it is possible.
Maximising your benefits this tax season is a topic everyone would love to hear since it is a key aspect of a healthy financial plan.
However, many investors still fail to take that into account when looking at how they can maximise their future investment returns.
Investors must make their money work smarter, not harder and using the seasonal tax breaks is one way to do so. Remember, if you don’t make use of them each year, you forfeit them, so it’s a good idea to familiarise yourself with what’s on offer.
Speaking of offers, one might cringe at the thought of filing anything tax-related due to the long admin the process entails. When it’s tax season, the last thing you want to do is wait or spend hours filing documents that make you regret not taking that account lesson back in school.
Fortunately, the turnaround time for tax processes has sped up tremendously over the years, especially since the introduction of TaxTim. Thanks to this platform, one can easily complete their return or filing in 20 minutes or less using any mobile device – all from the comfort of their home.
Sounds too good to be true? Try it
What to prepare before filing starts
According to SARS, now is a good time to get your tax matters ready to ensure a smooth filing experience! Make sure that you have received your IRP5/IT3(a)s and other tax certificates like medical certificate, retirement annuity fund certificate and any other 3rd party data that are relevant in determining your tax obligations. Reset your eFiling username and password if you have forgotten them. Update your personal information such as banking details, address and contact details online on eFiling or the SARS MobiApp.
Here’s what you can claim as a deduction to reduce your tax
According to a tax specialist, alaried employees all over the country are busy filing their tax returns in the hope that perhaps they will be due a refund. For most who earn income from their employer they have already paid their taxes in the form of Pay-As-You-Earn (PAYE), but now what? Although salaried employees are limited, by tax law, as to what they can deduct from their income, there are a few things that can be claimed. Deductions against income reduce ones Taxable Income and thus reduce the amount of tax owing to SARS. The allowable tax deductions are:
- Medical Aid contributions and other medical expenses
- Income protection contributions where you take out a policy with a service provider in the case you are no longer able to work anymore
- Donations paid to registered Public Benefit Organisations – for example a charity
- Retirement Annuity and Pension Fund contributions which save towards the day you retire
- Certain legal costs which relate to any income you may have earned
- Wear & Tear on assets used for work – for example computer equipment, mobile phones, machinery
- Bad debts you may have had during the year (A bad debt is income you have earned but you cannot collect – a client refuses / is unable to pay!)
- If you mainly work from home and mostly earn commission then costs relating to the office in your home
Travel expenses will get taken into account as well – you must keep a logbook detailing all travels. The opening and closing km’s for the tax year as well as all the km’s you�traveled�purely for business purposes must be recorded. Also keep all the details of the car you used!
Unfortunately these are the only deductions you can claim if you are a salaried employee. s23(m) of the act limits these deductions to those above. So when completing your income tax return and planning for your future financial wellness remember what items you can deduct or claim.
Important note: If you are a Momentum client and/or Momentum Multiply member, don’t forget that the TaxTim service comes completely FREE of charge for you. As a bonus, your free Tax Health Score also tells you how you can become more tax efficient.
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