Pat Blamire, Certified Financial Planner® at Chartered Wealth Solutions, gives us some practical advice regarding submitting our tax returns.
1 July is the start of the 2015 Tax Season for Individuals. During Tax season, you need to submit an income tax return called an ITR12 that covers the income you earned during the 2015 tax year (it runs from 1 March 2014 to 28 February 2015).
Important dates to be aware of are as follows:
- 30 September 2015 for those people who submit manual or postal submissions
- 27 November 2015 for those people who wish to call at a SARS branch and ask them to assist you with completing your tax return
- 27 November 2015 for you to complete your own tax return, electronically
- 29 January 2015 if you are a provisional taxpayer, and submit your tax return electronically
Certain people do not need to submit a tax return – those who have earned less than R350,000 during the tax year, provided:
- This income is earned from one employer only
- You have no allowances paid to you (e.g. a car allowance), and you do not earn other income such as interest or rental income
- You are not claiming any deductions, such as medical aid expenses or retirement annuity contributions
Make sure that you have all the applicable documents when you complete your tax return, such as:
- IRP5 or IT3(a) certificates from your employer or institution from which you receive your annuity income from
- Medical aid certificates, and, if you have incurred additional medical aid expenditure, receipts of this expenditure
- Retirement annuity fund contributions, and income replacement contributions
- Tax certificates for investment income (IT3(b))
- Tax certificates for capital gains (IT3(c)) or information on capital gains
- Travel logbook if you are claiming against a travel allowance
- Completed confirmation of diagnosis of disability form (ITR-DD) if you have a disabled person in your family, for which you wish to claim expenditure
Individuals are allowed certain exemptions for certain income, for example:
- Interest exemption: R23,800 if you are under age 65, and R34,500 if you are age 65 and over. If you earn foreign interest, there is not exemption on this.
- Capital gains: R30,000 of capital gains made on, for example, investments, when they are sold. R2million when selling your primary residence. One third of amounts in excess of these exemptions is added to your taxable income, and you will need to pay tax on this
- Dividends: You receive dividends after the 15% Dividends Withholding Tax has been deducted, and they are therefore tax free in your hands. Foreign dividends, however, will attract income tax.
It is very important that you complete your tax return correctly. If you omit to include any information when submitting your tax return, SARS may penalise you for not completing your return correctly. On the other hand, if you do not claim all your allowable deductions, you may not get the full refund that you are entitled to. If you are unsure, you can go to your local SARS office and ask them to assist you in completing this return. Alternatively, you could use the services of a professional who will ensure that your tax return is correctly completed.
We suggest that you do not wait until closer to the deadline, and get caught up in the rush. Submit it timeously, especially if you normally receive a tax refund.