10-point guide to fil­ing your tax re­turn

Tax Sea­son 2016 opened yes­ter­day, which means you can of­fi­cially com­plete and sub­mit your in­come tax re­turn. Mark Bechard lists 10 things you should know about do­ing your duty to the tax­man.

Weekend Argus (Saturday Edition) - - PERSONALFINANCE -

only one em­ployer;

◆ You had no other source of in­come, such as a car (travel) al­lowance, busi­ness or rental in­come, or tax­able in­ter­est on any in­vest­ments; and

◆ You don’t have any de­duc­tions you can claim, such as med­i­cal scheme con­tri­bu­tions, re­tire­ment fund con­tri­bu­tions and travel ex­penses.

Tax­able in­ter­est is any in­ter­est you earn over the ex­emp­tion of R23 800 if you are un­der 65 years of age, or over R34 500 if you are older than 65. You might have to sub­mit a re­turn even if you re­ceived no in­come and have no de­duc­tions to claim. The South African In­sti­tute of Char­tered Ac­coun­tants says there are three in­stances where non- in­comeearn­ers have to sub­mit a re­turn:

◆ You are a South African res­i­dent who owned for­eign as­sets ( in­clud­ing for­eign cur­rency) worth more than R225 000 at any point dur­ing the tax year – for ex­am­ple, you had $20 000 in a United States bank ac­count earn­ing zero in­ter­est, or you own a house in Namibia with a value of more than R225 000 where some fam­ily mem­bers live rent-free.

◆ You are a South African res­i­dent who owned shares in a for­eign com­pany in which more than 50 per­cent of the shares were owned by South Africans. For ex­am­ple, you and a Zam­bian friend started a com­pany in Zam­bia. You own 60 per­cent of the shares and your friend owns 40 per­cent. You quit your job, and your wife sup­ported you for a year so you could give the busi­ness your full at­ten­tion. Al­though you did not earn an in­come dur­ing the tax year, you must sub­mit a re­turn, be­cause your share­hold­ing, as a South African, ex­ceeds 50 per­cent.

◆ You are a rep­re­sen­ta­tive tax­payer: some­one who is legally en­trusted with en­sur­ing that a le­gal en­tity ful­fils its tax obli­ga­tions – for ex­am­ple, the pub­lic of­fi­cer of a com­pany or a trustee of a trust. If a com­pany or trust does not sub­mit a re­turn or pay tax, you will be held re­spon­si­ble by SARS. For ex­am­ple, you left your job and started a com­pany. You lived off your sav­ings while get­ting the com­pany started and re­ceived no in­come from the com­pany. As the sole share­holder, em­ployee and di­rec­tor, you are re­spon­si­ble for the com­pany’s taxes. You may hire an ac­coun­tant, but the buck stops with you, and if your com­pany does not ful­fil its tax obli­ga­tions, SARS tar­gets you, not your ac­coun­tant. Tax Sea­son pro­vides fraud­sters with fresh op­por­tu­ni­ties to steal your money. Es­sen­tially, they send emails bear­ing the SARS brand­ing that pur­port to be ver­i­fy­ing your de­tails or no­ti­fy­ing you of a re­fund. An­dre Dames, a part­ner at tax and au­dit­ing firm Mid­del & Part­ners, says that, of late, scam­sters have turned their at­ten­tion to small busi­ness own­ers, by pre­tend­ing to be agents col­lect­ing un­paid taxes or of­fer­ing to “wipe away” un­paid taxes, for a fee.

He says SARS has ap­pointed three agen­cies to man­age the col­lec­tion of debt: CCS Credit So­lu­tions, NDS Credit Man­age­ment and Lek­gotla Tri­fecta Cap­i­tal Con­sor­tium. You should re­port any other debt col­lec­tors or self-pro­claimed SARS of­fi­cials to SARS.

Dames says busi­ness own­ers should re­mem­ber that all out­stand­ing tax, VAT and du­ties must be de­posited di­rectly into SARS bank ac­counts. From April 1, SARS does not ac­cept man­ual pay­ments at SARS branches; pay­ments can be made only at ap­proved banks, via eFil­ing and via elec­tronic funds trans­fer.

The SARS web­site (www.sars.gov.za) has ex­ten­sive in­for­ma­tion on how you can pro­tect your­self from on­line fraud, as well as ex­am­ples of some of the lat­est scams do­ing the rounds. On the home page, click on “Fight­ing tax crime”, then go to “Iden­tity fraud” or “Scams and phish­ing”. There will be some changes to the re­turn this year. At an SA In­sti­tute of Tax Pro­fes­sion­als we­bi­nar ear­lier this week, SARS said the fol­low­ing changes have been made:

◆ You will not be able to edit or delete the pre- pop­u­lated IRP5 in­for­ma­tion on your re­turn. If your em­ployer has pro­vided SARS with in­cor­rect in­for­ma­tion, you will have to con­tact your em­ployer to have it cor­rected.

◆ A dis­tinc­tion will be made be­tween in­come and ex­penses linked to a lo­cal busi­ness and rental in­come and ex­penses as­so­ci­ated with let­ting out a prop­erty. You will have to en­ter the rental in­come and ex­penses for each prop­erty you rent out.

◆ The re­turn will make pro­vi­sion for you to en­ter con­tri­bu­tions you have made to tax-free sav­ings ac­counts.

◆ If you want to claim a de­duc­tion for do­na­tions to a pub­lic ben­e­fit or­gan­i­sa­tion, you will have to en­ter the or­gan­i­sa­tion’s ref­er­ence num­ber. If you file your re­turn elec­tron­i­cally at a SARS branch, re­mem­ber to take all sup­port­ing doc­u­men­ta­tion with you: ◆ Proof of iden­tity – your iden­tity book, pass­port or driver's li­cence.

◆ Proof of in­come – IRP5 ( from an em­ployer), IT3( a) ( pen­sion or re­tire­ment fund), IT3(b) (in­vest­ments) and bank state­ments.

◆ Proof of al­low­able de­duc­tions – state­ments from your re­tire­ment an­nu­ity fund, med­i­cal scheme, an ap­proved pub­lic ben­e­fit or­gan­i­sa­tion (do­na­tions tax ex­emp­tion), ac­counts from med­i­cal prac­ti­tion­ers ( health- care ex­penses not paid by your med­i­cal scheme), a log-book to claim a travel al­lowance), proof of ex­penses in­curred to gen­er­ate rental in­come ( for ex­am­ple, proof of in­ter­est on mort­gage bond pay­ments, levy state­ments, rates ac­counts). If a tax prac­ti­tioner com­pletes and sub­mits your ITR12 on your be­half, you are still re­spon­si­ble for the ve­rac­ity of the in­for­ma­tion. You are also re­spon­si­ble for any out­stand­ing re­turns, pay­ments and penal­ties. It is also your re­spon­si­bil­ity to check that your prac­ti­tioner is reg­is­tered with a “recog­nised con­trol­ling body”, as well as with SARS. Ask your tax prac­ti­tioner for his or her tax prac­ti­tioner reg­is­tra­tion num­ber, which you can verify on eFil­ing. On the eFil­ing home page, click “Quick­Links” and from the drop-down menu choose “Con­firm prac­ti­tioner reg­is­tra­tion sta­tus”. Don’t panic if you have for­got­ten your eFil­ing log-in and pass­word. Go to www. sarse­fil­ing. co. za, click on the ques­tion mark and re­quest your log- in de­tails. SARS will send them to your reg­is­tered email ad­dress or cell­phone num­ber.

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