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Employed Commission Earner and Investor - Where do I stand?

Posted 5 July 2015 under Tax Questions


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Keza says:
2 July 2015 at 20:36

Hello

I am hoping you can help. A few things:

My retirement annuity reflects as code 3697 on my payslip. Is this normal, does it count the same as 4002?

I receive a car allowance, but my vehicle installments, insurance and petrol costs me more, is there a smarter way of doing this?

More than 50% of my salary was commission from a single employer this year. Can I still claim fuel,l insurance and depreciation although I have a car allowance? What other expenses can I legitimately claim (i.e entertainment, networking meetings etc. ) Can I claim for expenses my company have re-imbursed me for?

I also became a member of a company but only in May this year, does this count for the 2015 tax return season?

Finally I received an IT3b from the banks for my savings accounts, but in Jan 15 I also started to trade ETFs (3 local funds and one abroad). They issued me with a IT3B and IT3C but I haven't sold any units and I haven't got any proceeds, gains or losses. What do I do?

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TaxTimTaxTim says:
3 July 2015 at 8:39

The IRP5 code 3697 is for incomes which are earned which relate to retirement funding income, it is not your retirement annuity, but a source code SARS use for totals. Do you contribute to a provident fund? Is there a source code 4002 on your IRP5 under the deductions section? This is not a retirement annuity fund, but a provident fund.

If your commission is greater than 50% of your overall income then yes you can claim all those expenses, however if you receive a travel allowance then you actually need to complete the travel allowance section. There are two options either actual costs or based on the fixed cost table - please make use of our Travel Allowance Calculator to see which option is better.

Being a member will not affect the return for 2015, but for 2016 rather.

For the ETF's you would include the interest off the IT3b under the investment section of the return.

All of these questions are asked via our TaxTim process and then we will complete your return for you and submit it directly to eFiling.


Keza says:
4 July 2015 at 15:19

Can I claim expenses already paid back to me by my company (as I earn more than 50% commission)

My annual car allowance on my IRP5 is R48000.
Using your calculator my SARS deemed costs would be R91000.
Using actual costs it would be R70167

As I can only claim up for R48000 as clearly my car allowance is too low would it not be more profitable to use the actual costs method as my car allowance is insufficient?


TaxTimTaxTim says:
4 July 2015 at 19:28

You cannot claim expenses which your company reimburses you for unfortunately because technically they paid for them. However you can claim all the other expenses that you incurred in earning this income which were paid by you. Remember they must be business related.

Do you receive a travel allowance as well?


Keza says:
5 July 2015 at 10:19

Yes as per my last reply I get a R4000pm travel allowance but my actual costs are much higher:

My annual car allowance on my IRP5 is R48000.
Using your calculator my SARS deemed costs would be R91000.
Using actual costs it would be R70167

What should I do?

Other questions relating to your reply:
If I would like to claim expenses from entertaining clients will a bank statement suffice as evidence?
Also it appears your tool does not allow me to do a calculation before submitting?


TaxTimTaxTim says:
5 July 2015 at 15:18

Unfortunately if you receive a travel allowance then your deduction is limited to the actual allowance regardless of what the calculation comes out to - so you would have R48 000 in any event.

A bank statement will not be enough for SARS, but include a log record detailing the event with the client and the dates and perhaps SARS will accept that together, they are very sticky with entertainment. All you can do is provide them with as much information as possible and hopefully that will be acceptable.

You can make use of our Tax refund calculator to get an idea of your refund.


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Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE