Tax season is a daunting time for many people, especially if you’re a provisional tax payer. It’s a good idea to enlist the services of an accounting firm that offers expert accounting services ensuring that all of your finances are in order.
Here are four tips to help you save money on your SARS tax returns.
Open up a tax-free savings account
A tax-free savings account is exactly as it sounds: your money is invested in products such as unit trusts, bonds, fixed savings accounts, among others. All of the returns such as dividends, capital gains are not taxed.
You are allowed to contribute R33,000 per tax year (1 March to 28 February; 29 February if it’s a leap year.) There is a lifetime contribution limit of R500,000. Please note that your annual contribution cannot be carried over into a new tax year e.g. if you invest R20,000 during the year, the remaining R13,000 will be forfeited. You will start every new tax year with a limit of R33,000.
Contribute to a retirement fund
Contributions to a retirement product such as a retirement annuity or provident fund are tax deductible up to a limit of 27.5% of the larger of taxable income (to a maximum of R350,000 per year.)
A pension or provident fund will be set up by your employer and these monthly contributions will be reflected on your payslip.
Due to the fact that you aren’t able to access the money until you are 55 years old, a retirement annuity is a great way to reduce your amount of payable tax. This gives you plenty of time to save for the future while simultaneously saving on annual tax contribution.
Keep a logbook if you drive a company car or have a travel allowance
If you receive a travel allowance from your employer, it’s important to know that this is a fringe benefit and forms part of your taxable income. However, if you keep logbook of your mileage used for business, you can submit a claim for a travel deduction which can reduce your contribution to SARS.
Claim expenses if you’re a freelancer
If you’re self-employed e.g. a freelancer; independent contractor. You are allowed to deduct business-related expenses against your annual income. For example, phone and office space (if you work from home, the room you work in counts as office space.) Ensure that you keep a record of all your expenses, supplemented by the applicable invoices.
WJC Accounting offers a variety of tax services including:
- Preparation and submission various tax returns
- Assistance with tax registration
- Liaison between you and SARS
- Tax advice to minimise tax liability within confines of the Law
- Application for tax clearance certificates
- Income tax guides
Do you need help with your taxes? Contact WJC Accounting for comprehensive, affordable tax services.