Guiding consumers since 2009

Are you due a refund from SARS?

By Staff Writer
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.
 
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

Recent Articles

Featured Travel ban – how to claim for the loss incurred

As with the recent Covid-19 pandemic, governments sometimes issue travel bans to prevent people from travelling to other countries. This becomes even more complicated if you’ve already planned and paid for your trip. Your flights will be cancelled, and you may lose money from cancelled accommodation arrangements. How do you claim for the financial losses incurred due to a travel ban?

How to finance and insure a second-hand vehicle

Buying a second-hand vehicle may suit your budget better than acquiring a new one. But what impact does an older model have on vehicle finance and car insurance? We reached out to specialists in the field to explain what the financial implications are of pursuing a second-hand vehicle.

Reading your loan agreement: look out for this

Many people don’t read their loan agreements. They just sign on the dotted line without realising that they could be signing their lives away. But it’s important to review your loan agreement before and after taking your loan to avoid future setbacks.

 

Part 1: The difference between good and bad debt

In the first part of our Debt-ucate series we explore the difference between good and bad debt and why debt is, in fact, necessary.

Deals

Udemy online course for R180

Price: R180
When: Until 27 March 2020
Where: Online

Educate your kids for free with Skills Share

Price: Free
When: Daily
Where: Online

Take advantage of payment holidays from Standard Bank and Nedbank

Price: Free
When: From 1 April to 30 June 2020
Where: Nationwide