Latest Posts in TaxTim's Blog

IRP5 FAQs



What is an IRP5?
An IRP5 is the employee's tax certificate that is issued to him/her at the end of each tax year detailing all employer/employee related incomes, deductions, and related taxes. The employee uses it specifically to complete his/her income tax return for a specific year.

Do I need an IRP5?
Yes, you do if you were employed during the tax year.

Can I submit a return without an IRP5? OR Am I able to submit returns without my IRP5? OR Are you able to submit without the IRP5?...

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2017/2018 Budget - The rich are going to pay more, but what does that mean for the rest of us?





Personal Tax Rates (rates below)

Individuals across the country, those qualifying above the new tax threshold of R75 750 (previously R75 000) will be paying increased taxes of R16.5bn (previously R5.65bn in actual tax increase) for the next tax year, most of this will be for high income earners, however. Taxpayers generally across the board will be earning the tiniest bit more money each year as their tax brackets...

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Depreciation FAQs



What constitutes wear and tear? What is depreciation? What is the depreciation limit?
Wear and Tear or Depreciation is the decrease in value of an asset. SARS allows you to deduct this decrease each year based on the tables. See here for the latest Depreciation Calculator

Can I claim depreciation for my car as a sole proprietor if I have a log book by using the tax table?
You would be able to depreciate your car over 5 years, but you need to then apportion it for the use of business travel based on the logbook...

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Tax Exemption for Foreign Employment Income : What You Need to Know




If you think earning an income from a global source isn’t taxable on home soil, I’m afraid I have some bad news. Whether you’re earning Dollars, Euros or Yen, as a South African, it’s more than likely you’ll have to pay tax on this income. This is because South Africa’s taxation system works on a residence-based tax system meaning we’re taxed on worldwide income.

There is, however, some good news!

Section 10 of the Income Tax Act offers a list of conditions where income earned (or at least a portion of it) for services rendered outside of South Africa borders will be exempt from income tax.

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6 Reasons Accounting Records Are Critical to Your Small Business




You’re an entrepreneur. A wildly innovative individual. An ideas person. A make-things-happen person. A real go-getter. Passionate about your business and pursuing your dreams. And brilliant at keeping your accounting records up to date. Chances are that last one doesn’t ring true, does it? Don’t feel alone, financial record-keeping is the bane of existence for most small business owners and managers. 

When you’re in the throes of building your empire from the gr...

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Special Stopper at SARS: What We Know For Sure




Over the last few weeks, our helpdesk has received an alarming number of queries from taxpayers asking what they can do as their refunds are being held back by SARS due to a special stopper being placed on their account. It’s a complex situation and the only advice we've been able to provide has been for the individual to make contact with SARS directly to try resolve the matter.

The South African Institute of Tax Professionals (SAIT) issued a statement on Tuesday 20 September 2016 advising that they’re looking into the issue after numerous complaints had been raised...

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Tax Free Savings Accounts: Everything You Need to Know



As a nation, South Africa does rather poorly on the savings front. With the majority living near or below the breadline, there’s not much to save when you’re more concerned with just getting through the month. Our high levels of consumer-debt, combined with little in the way of personal savings, means we become financial burdens on the government in the long-run...

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5 Great Reasons to File Your Tax Return Early This Year



Are you the type of person dashing into the store to grab a birthday gift en route to a party? Or perhaps you’ve found yourself scratching through your craft box at 11pm the night before to make a ‘World Book Day’ outfit for your son? Or possibly you’re one of the hundreds of thousands of South Africans who waits until the last week of November to file your tax return?

While I’m not suggesting that every minute of your life needs to be pre-planned and organised, there are certainly a number of benefits to getting your tax done early...

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The Smart Way to Save Tax when Renting out a Property



Taxpayers who earn rental income from a second property of theirs often don’t know what they need to do when it comes to declaring this income to SARS. Sometimes taxpayers think that they don’t have to declare this extra income, or can hide it from SARS by not entering it on their tax return form - a big mistake!

The truth is that extra income earned from rental is taxable, and SARS needs to know about it. In some cases - if the amount earned (profit) outside of a salary...

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What is Turnover Tax?



Turnover Tax is a simplified tax system only available to sole proprietors, partnerships, companies or close corporations with a “qualifying turnover” of less than R1m per year. These types of entities are called micro businesses.

As the name implies, Turnover Tax is a type of tax, which is calculated against the turnover of a business, as opposed to a percentage of profit (i.e. income less business expenses) as per usual business tax. This difference reduces the administr...

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4 Common Provisional Tax Penalties - And How to Avoid Them



 


Seasoned provisional taxpayers – those people who earn income from sources other than, or in addition to a regular ol' salary or traditional payment from an employer - are all too familiar with the process of estimating taxable income and submitting provisional tax returns. Not once - but twice a year!

Yes, it's a bit painful (although TaxTim makes it super easy) but entirely necessary if you don't want to be lumped with penalties from SARS...

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2016 Budget Speech: Welcome Back, Minister! You Couldn't Have Returned Just for the Free Lunch?



The 24th of February 2016 was supposed to be a watershed moment for the Economy of South Africa. The old-new Minister of Finance, Pravin Gordhan, was to deliver his budget for the 2016/2017 tax year and save South Africa from a financial pit-fall in the form of an International Ratings Agency downgrade. The jury is still out on whether or not this is possible. Immediately after the budget was revealed the Rand tumbled 2%, which doesn’t bode well for market sentiment. However, ...

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2016/2017 Tax Tables



Income Tax Tables for the 2017 Tax Year - 1 March 2016 to 28 February 2017


Income Tax Thresholds



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What You Need to Know About Changes to the Tax Clearance System



Tax compliance makes its way into many aspects of life and business. Perhaps you’re considering applying for a tender, or for a foreign investment allowance to move funds offshore, or even looking to emigrate and leave our shores. These are just a few examples of instances where you may be asked by a third party to provide a Tax Clearance Certificate.

And until now, the course of action to obtain your certificate has been a tedious one.

Upon request, SARS would check its records and verify that the taxpayer had filed all required tax returns, paid all taxes, penalties and interest due, before releasing a Tax Clearance Certificate confirming a good standing...

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The Ins and Outs of Donations Tax



Have you been the lucky recipient of a gift or donation from a generous family member of friend? Perhaps they struck it lucky on the Lotto and decided to share their winnings with you!

Or maybe you're the giving type and have donated cash, shares or even property to someone you felt deserved a little boost.

Irrespective of whether you're the giver or receiver of a donation or gift, it's good to understand donations from a tax perspective, and how to declare these to SARS.

Ready to find out?

Let's get started.

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Retirement Funds Tax Laws Effective 1 March 2016 - How SARS' New Changes Affect You!



If you’re diligently putting money away for your retirement in the form of a pension, provident fund or retirement annuity, you may be curious – perhaps even a touch concerned – about the changes SARS has made to the retirement fund tax laws, which come into effect on 1 March 2016.

If you missed the news, here's a quick overview.

SARS have changed how contributions to retirement funds are treated from a tax perspective, as well as how your funds are managed when you retire...

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Calculate interest on late provisional tax payment



SARS charges interest on late payments made toward provisional tax deadlines.

To calculate this late payment penalty, use the formula below:

Provisional tax amount x 7% x (days after deadline / 365)


Use the calculator below:



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Swear an affidavit for SARS



Has SARS asked you for documents that you can't produce, such as an old IRP5 from a prior year that your employer doesn't have, or that simply doesn't exist?

To prove to SARS that you cannot produce the document they want, you will need to produce what is called a sworn affidavit.

This is basically a letter that you must write, that you then take to your nearest police station to get signed and stamped.

Items to include:

1. Your name, ID number and contact details...

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SARS isn't paying my refund, they want my old returns!!!!



Taxpayers this year are facing a new gripe with SARS when it comes to receiving those well-earned refunds. The current two scenarios are:

  • NO AUDIT: A taxpayer files a tax return, gets their ITA34 and does not need to submit supporting documents; or
  • AUDIT: A taxpayer files a return and in their ITA34 is requested to submit supporting documents, after which they receives a Completion Letter stating "no adjustment made".

In both these cases a refund should be paid out a few days later (if the taxpayer is due one), however thousands of taxpayers still have not been paid their refund. Here’s why!...

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Where can I get my Medical Scheme Tax Certificate?



In order to complete the Medical section of your annual tax return, you will need a tax certificate from your medical scheme (if you contributed to a medical scheme that is!).

This certificate details exactly how much was paid to the medical aid for yourself and your dependents over the course of the tax year (1 March to end Feb). It also details how much money you paid for other medical expenses, such as medicines and doctors expenses, which you claimed for, but your medical aid did NOT cover...

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SARS Tax Tables 2015



Tax Thresholds:


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Thank you Minister - we expected worse! 2015 Budget



New Finance Minister Nene delivers his first budget with some “better than expected” tax increases. The fight against corruption was highlighted with the minster announcing a series of reforms and procedures to be introduced both to curb corruption and make doing business with the state easier. The minister announced that R25bn would be saved in expenditure over the next two years, but R16.8bn is to be raised this year via tax increases and a remarkably large rise in the fuel and road accident fund levies. To be honest, we expected greater tax increases from the minister, thankfully he spared us some of the pain! ...

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What's the delay with getting my SARS Refund?



SARS has typically been quick to refund taxpayers who have filed their tax returns and are due a refund, with money appearing back in their bank accounts smoothly and reliably, often within a day or two.

However since the opening of this tax season on 1 July 2014, the process appears to have changed and suffered a few hiccups along the way. From the queries we have received over the last month from multiple confused taxpayers, it would seem that thousands of refunds were first paid out, then reversed...

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How to calculate totals under source codes 3696, 3697 and 3698



If you tried to submit your tax return and got an error relating to 3696, 3697 or 3698 then you might have simply left an amount out!
Check your IRP5 to make sure you answered TaxTim's questions for these amounts correctly.

 
Your IRP5 can show one or more amounts with source codes describing the income you received from your employer that year.

A common example would be:

Salary R240,000 - source code 3601 ...

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What to Expect after Submitting your Tax Return to SARS



As soon as tax season opens in July, many taxpayers rush to submit their ITR12 tax returns as early as possible, eagerly hoping for a nice refund. After the rush, when nothing happens, they often ask us "Ok I have submitted. What happens now?" In most cases where an income tax refund is due to a taxpayer, SARS pays it out within one or two days. However there are many instances when this does not happen, leaving people feeling unsure as to what is happening with their tax return and tax refund. ...

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 Do Your Tax Return Easily
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Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

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