How to deal with changes in your tax status

Tax filing season opened on July 1, leaving many employees anxious. Concerns include the prospect of searching for misplaced documents and forgotten receipts, the uncertainty of what tax deductions to claim, and how to avoid mistakes that could lead to delayed refunds — or worse, penalties.

The South African Revenue Authority’s automatic assessment process offers some relief to those with relatively straightforward tax affairs – for example, employees of a business with a single source of income. Three million non-provisional taxpayers are part of that process this year, and they won’t have to file taxes if SARS is happy with the outcome.

Ratings are compiled by SARS using data from employers, banks, medical plans and others. Ratings are returned via eFiling or SARS MobiApp.

If you agree with the assessment and a refund is due, you should receive that payment within 72 hours. If you owe money for SARS, you can pay via eFiling or MobiApp.

Change of tax status

However, the employment status of many people has changed or become more complicated since the last tax filing season. Thousands of people have been made redundant, changed jobs, become self-employed, left South Africa or have taken up self-employment in addition to their regular work. Their personal status may also have changed due to marriage, divorce or parenthood.

In general, it is worth contacting SARS, your accountant or a reputable tax practitioner if you are unsure of your changed tax status. This ensures that you get up-to-date advice tailored to your particular situation. The professional’s fees could be
covered by the tax savings.

Before choosing a tax professional, shop around and ask the following questions:

  • What professional order are you registered with?
  • What are your fees and what do they cover?
  • Can you help with objections and appeals if I disagree with the SARS assessment? If yes, what do you charge for it?
  • Do you allow customers to share access to their eFiling profiles?

Tax administration and savings advice

To manage your taxes effectively, you must be organized, keep your personal and professional documents and keep them safe.

Business Records: Depending on the type of work you do, you may be able to claim expenses related to your cell phone, rent, rates, electricity, accounting and tax fees, computer, your vehicle and any other income-related goods and services. You can only claim use related to your work, so receipts and records are important.

Working remotely: If you are a South African taxpayer or tax resident, you are liable for tax on your worldwide assets and income. Whether you work in South Africa or another country, you must report your income to SARS and pay taxes.

Personal bills: You will need proof of items such as medical bills and interest earned on investments to qualify for these charges.

Tax savings: There are many ways to lower your tax bill, whether it’s contributing to your retirement and investing in your children’s education or supporting your favorite charity, provided it is duly registered.

Fraud alert: Scammers may impersonate a SARS official and ask for your confidential information. Fraudsters can also falsely inform you that you are being verified or make an unauthorized change to your eFiling profile using information obtained through phishing.

  • Anthony works for personal finance website JustMoney.co.za

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