Provisional Tax Posts in TaxTim's Blog

Sole Proprietor or Company: What's Best for Tax?



Getting a new business venture off the ground is an equally exciting and stressful time. You’re enthusiastic about getting your new product or service out into the market, but you face quite an administrative process to get it off the ground legally.

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Provisional Tax Penalties



Provisional Tax Penalties

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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Top Tips for Provisional Taxpayers



Top Tips for Provisional Taxpayers

1. Estimate your taxable income for the whole tax year

Remember that both your first and second provisional return (IRP6) must reflect an estimate of your taxable income for the full 12 months of the tax year.

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How Long do I have to wait for my tax refund?



How Long do I have to wait for my tax refund?

Like in previous years, there have always been opening tax season niggles and 2019 has been no different. Patience is a virtue, so the adage goes. And when it comes to waiting for responses from most government departments, they can certainly put your skills of tolerance to the test. Our helpdesk is inundated with questions about how long SARS will take to react or respond to certain requests or submissions. The short answer is ‘typically, quite a while’. You can imagine that during their busy filing season there are hundreds of thousands of documents being processed and not all administration can be automated...

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TaxTim’s top tips for Provisional Taxpayers



TaxTim’s top tips for Provisional Taxpayers

  1. Don’t offset losses – SARS may not allow this

If you run a business or rental property, which is running at a loss, don’t offset this loss against other taxable income you may have when calculating your estimated taxable income for your provisional return.

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Do You Need to Ring-Fence Your Business or Rental Losses for Tax?



When pursuing a business activity, trade or renting out a property, you’re no doubt doing so to make some money, but the reality for self-starters is that there’s a good chance it’s going to take some time for your venture to break even, which can often mean facing a loss.

Your additional income is of interest to SARS as it translates into more tax revenue for them, so how do you record your loss to them? And when, how and where is the loss applied from a tax perspective?

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The 3 R's: Returns, Rebates and Refunds Explained



The 3 R's: Returns, Rebates and Refunds Explained

When it comes to tax jargon, most people prefer to bury their heads in the sand instead of trying to understand all the confusing terms that tax practitioners use. Taxpayers just want to do their tax quickly and easily, and if they’re due - receive some money back from SARS. A lot of confusion surrounds the process, but by understanding three simple terms you can make tax season a little bit easier.

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Alert: Change to Provisional Taxpayer Rules



Currently, there is a legal obligation for South African resident employers to register with SARS for employee’s tax (PAYE) so they can withhold tax on a monthly basis from their employees’ salaries, and pay this over to SARS. However, the situation is different for foreign companies who employ South African residents. If these companies don’t have an office or a branch or some other legal representation in South Africa, they don’t have an obligation to register with SARS for PAYE...

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Provisional Tax FAQs



What is a provisional tax?
Provisional tax is paid by people who earn income other than a salary / traditional remuneration paid by an employer.

How do I convert from a provisional taxpayer to a regular taxpayer? OR How do I de-register as a Provisional Taxpayer?
Your tax number stays the same, just make sure that it has not been deactivated. This has happened in some cases. You will also need to de-register as a Provisional Taxpayer (this won’t affect your tax number) You can do this on eFiling by going to the Home Tab and clicking Tax Types and de-registering there. This will mean you are only a "regular" taxpayer...

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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?



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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10 Ways to Spend Your Tax Refund



10 Ways to Spend Your Tax Refund

It’s tax season, and one of the most compelling reasons to file a tax return (besides the fact that it’s the law, of course) is the chance that you’ve overpaid the taxman and that you’ll hear that sweet SMS sound of funds deposited into your bank account from SARS. Of course the best part about a tax refund is that it’s likely you hadn’t budgeted on the extra cash, and so you’re able to spend it as you please. Whether you choose to do so sensibly or splurge a little, we’ve rounded up some ideas on how to spend or invest your tax refund.

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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 administrat...

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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...

Read more →

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 10.25% x (days after deadline / 365)


Use the calculator below:



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How to manage your tax affairs running a business in your own name as a sole-proprietor



South Africa is brimming with entrepreneurs and small business owners who keep the economy running. These people may or may not be earning a regular salary too, but all of them operate a non-registered business in their own name - a so-called sole-proprietorship. In this blog post we will discuss how such a business pays tax, how it is taxed, and how to separate personal and business affairs to make tax deductions correctly.

To register or not to register as a company? ...

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I'm retired at 65 years and older - what income tax benefits do I qualify for in retirement?



It would seem that SARS often prioritises younger taxpayers who are still working and receive a constant flow of income. However for many older South African taxpayers over the age of 65 who have retired or are still working, there are actually quite a few benefits to enjoy.

Firstly at 65 the tax threshold above which you would even begin paying tax is higher, at R99 056 per year (in 2012 it was R93 150). What's more, those taxpayers who are older than 75 years of age get an even bigger break at R110 889 per year (in 2012 it was R104 261)...

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Do I earn enough to have to pay tax?



Why must I pay tax, I don’t earn enough! Will I get a penalty if I don’t disclose all my income to SARS? These questions are common and usually include other sources of income such as interest from a bank account. If these earnings don't extend above the tax threshold then why disclose them and pay tax? Unfortunately while you may not have to pay tax on the income, you will certainly have to disclose it to SARS. Let’s assume you earn a salary of R200 000 a year and hav...

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South African budget 2012/2013 - "Tax by stealth"



Eagerly anticipating the budget this year and forever the optimist, Finance Minister Pravin Gordhan started off well: R9.5bn of individual tax savings and revenue collection up by R10bn from the latest estimates. However, for the individual taxpayer, things went slightly downhill from there... Let’s unpack this a bit.

Not all Doom and Gloom

Ok, ok so maybe I have been too harsh as only certain individuals (the richer ones) will actually be subject to greater tax, the lower end income earners will benefit quite a bit from the new tax changes...

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New tax credit to replace medical aid deductions in post 2012 Tax Year



The 2012 tax year has almost come and gone, and being annual budget time, anxious taxpayers are unsure what to expect. Is there any room to be taxed further? All will be revealed on Wednesday the 22nd, but in the meantime let's focus on the new medical aid tax regime.

Gone are the days of paying your spouse's medical aid and claiming the deduction just because you are in a higher tax bracket. From the 2013 tax year onwards that deduction is no longer allowed. Instead it will be replaced with a tax credit per dependent. "What is the difference?" I hear the average taxpayer ask, and "How does it affect me?" ...

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Tax Season 2011



So Tax Season has come and gone this November and yet Tim thinks some of you may have not submitted your returns yet.

Although filing season is over, you can still drop your returns off at SARS. (Penalties may apply) Remember provisional taxpayers have to submit before 31 January 2012.

Watch out for more updates!

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

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