Nicolette Dirk, finance writer, justmoney.co.za
According to the South African Revenue Service (SARS) over two million tax payers still need to submit their annual returns.
With just one month to go before the end of the 2013 filing season on 22 November, many taxpayers expect that filing their returns guarantees them a tax refund.
According to Marc Sevitz, co-founder of online virtual tax assistant TaxTim, the correct amount of tax is usually paid by employers on behalf of their employees via their PAYE automatically. This means there would be no unnecessary over-payment, resulting in no refund from SARS. But he added that there are a few common cases which can result in a refund being due.
When can you expect a return?
Sevitz said that you could get a return from the taxman if you contributed toward a medical aid, medical expenses or a retirement fund.
“The government allows deductions for health care for its citizens in a limited way, so if you have made your own payment then this can be used as a tax deduction to offset the tax that you owe SARS,” said Sevitz.
You could get a return if you changed jobs during the year or had ad-hoc work only. Sevitz said that in some cases when employers submit IRP5 documents for employees working for part of a year, they have to estimate the tax bracket for that employee for the entire year.
“If they estimate the employee will earn more than they actually end up earning, then it is possible that too much tax was paid and a refund is due to the employee,” said Sevitz.
He added that if you made any donations to charities during the year then a value up to 10% of your taxable income can be used to reduce the tax you owe SARS.
“If you use your personal laptop for work purposes and this is not subsidised then you can write off a portion of its purchase price each year and use this to reduce the amount you owe SARS. This write off is known as “wear & tear”, but called depreciation on your tax return,” said Sevitz.
Another way you can get a return is if you are provided with a travel allowance by your employer. According to Sevitz this counts as a fringe benefit on top of your salary and thus counts as extra income which SARS will tax you on.
“However if you can prove to SARS that you used your travel allowance by including data from your dutifully maintained vehicle logbook all year round, then this “extra income” is reduced along with your tax owed,” said Sevitz.
What reduces your chance of getting a return?
The chance of getting a refund is reduced if the tax return form is filled out incorrectly or is submitted without all the required details.
Finding the right help is essential when completing income tax returns and taxpayers need to understand the risk of accepting tax assistance from people who aren't officially registered as tax practitioners, especially when they promise guaranteed refunds.
Finding the right help is essential when completing income tax returns and taxpayers need to understand the risk of accepting tax assistance from people who aren't officially registered as tax practitioners, especially when they promise guaranteed refunds.
Taxpayers must make sure that anyone assisting them with their taxes is registered with SARS, and must understand that a tax refund is never guaranteed, only a potential reward for being a compliant taxpayer.
Sevitz warned that a silly mistake on your tax return can lead to an over-payment of tax but getting your tax return right first time can lead to a significantly larger refund being due. “Doing things incorrectly can mean a heavy penalty from SARS,” said Sevitz.
If you would like to find out more about filling out your tax form visit the TaxTim website on www.taxtim.com