How to get a tax rebate
1. If I run a side hustle – say a dressmaking business at weekends – can I claim for those expenses?
A: Yes, you can. When filing your annual tax return, put the income and expenses of your dressmaking business down as a ‘trade’. You can then claim (from the income of the business) any expenses that you have incurred from running that venture. For example, you can claim a home office expense if you work out of a room in your house that’s specifically dedicated to that
business. Other expenses such as cellphone and internet costs can also be claimed if they contribute to the running of the business.
2. Is it possible to reduce your tax if you’re paid a salary? A:
Yes, there are many ways to do so. The most useful one is to get your employer to pay a portion of your salary as a bursary for your child. There are conditions to this, of course, primarily that you earn R600 000 or less a year, and that the bursary isn’t more than R20 000 a year for a school learner or R60 000 a year for a university or college student.
3. What’s all this about retirement annuities and tax? A:
You can massively reduce your tax liability by contributing to a retirement annuity (RA). It’s the government’s way of encouraging people to save. For example, if you’re in the 36% tax bracket you can contribute R10 000 to an RA and reduce your tax liability by R3 600. In other words, you get two benefits: putting away R10 000 for your retirement and reducing your tax liability by R3 600.
4. Are charitable donations tax-deductible? A:
You may claim a tax deduction only if the organisation to which you donated money is able to provide you with a Section 18A certificate (see the SARS website for a list of institutions that can do so). Also, you may not deduct donations in excess of 10% of your taxable income.
5. Can I claim for medical expenses not covered by my medical aid? A:
Yes, you can. You need to fill in these details on your annual tax return – be sure to keep the invoices in case SARS asks for them. But you’ll have had to have spent a fairly large amount to get a reduction in your tax liability. It’s best to enter the details of out-ofpocket expenses on your tax return and let SARS do the calculation to see whether you’ll get a benefit from having paid these expenses.
6. If you’re a full-time employee but are required to work from home in the evenings and over weekends, can you put in a claim for having a home office? A:
Possibly, but only under very specific circumstances. Your employer must require you to work from home and you must work at home for more than 50% of your total time spent working. You must also have a room that is specifically equipped for use as a home office, and that’s exclusively and regularly used for that purpose.
7. I use a computer at work and a laptop at home. Can I claim for the cost of my laptop? A:
If you’ve paid for the laptop and are required to use it regularly to work at home, then you may be able to claim for it. If you bought the laptop for less than R7 000 you would be able to claim the full amount in one tax year (assuming you qualify for this deduction). The details of this claim will need to be inserted in your tax return to obtain this benefit.
8. My mother is in her eighties and has no income, so I pay her expenses: levies, rent, medical assistance and so on. Can I claim for those expenses? A:
You can claim relevant medical expenses that you have paid on behalf of your mother in a similar way to the out-of-pocket expenses discussed in Question 5. Bills for medical-related nursing homes, doctors and hospitals, and costs for prescription medicines may be claimed.
9. I’ve started a business that isn’t profitable yet, but I do have a small share portfolio. Do I pay tax on that, even though I’m not trading with it and just sitting on the shares? A:
If you have a share portfolio that you hold as a long-term investment then you will pay capital gains tax only when you sell the shares. Each individual also has a R40 000 annual capital gains tax exclusion, so you won’t be taxed on any capital gains less than that amount a year.
10. What are your top three tips for getting a tax refund? A:
1. Maximise contributions to your RA.
2. Get an agreement in place with your employer to pay part of your salary as a bursary for your school-going children.
3. Read my book!