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JZ says: 28 February 2017 at 11:23 I'm doing my provisional tax return and received a severance payments during the year as part of a voluntary retrenchment. My employer applied for a tax directive which was successful and I received the lump sum pay-out with the tax benefits associated on the sliding scale. How do I deal with this in my provisional tax return? If I enter the severance payment gross amount, the SARS eFiling system calculates taxes on it using the normal tax tables (it gets calculated at the highest marginal rates), then it says, I now need to pay a large amount over to SARS. Therefore, I get zero benefit of the reduced tax on the lump sum. |
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TaxTim says: 28 February 2017 at 11:44 Kindly remove the lump sum from your IRP6 as this isn't required on the IRP6. You will only refer to it on the annual tax return. |
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JZ says: 28 February 2017 at 11:50 I included it in the first provisional tax return. Should I make SARS aware of that error as the taxable income on the first provisional tax return is now a lot higher than the second? |
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TaxTim says: 28 February 2017 at 12:32 You don't have to worry about your estimate being less than the 1st period. Submit the 2nd period and when SARS eFiling warns you about it just continue as your annual tax return will sort out the confusion. |
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