REVENUE UP Was your medical claim disallowed?
AT FAULT: CORRECT SUPPORTING DOCUMENTS NEEDED
Another great way to find a good tax practitioner is to ask your friends, family and colleagues for a reference.
A tax practitioner’s fees to submit your return can vary, depending on how complex your particular return is and the amount of work it requires.
For example, a basic return for someone who only has an IRP5 can start at a few hundred rand; a complex return for someone with multiple sources of income can cost several thousand rand.
The tax season opens on July 1 each year.
Submit all your information and supporting documentation to your tax practitioner as early as possible. Waiting until the last week or two before the deadline often causes delays in getting your return submitted.
Keep a record of all your tax-relevant documentation throughout the year, as your tax practitioner will need this to ensure your return is completed accurately. This may include your IRP5, IT3 certificates, a travel-log book, invoices for medical expenses, your medical aid contribution certificate, and more.
Submitting inaccurate information can lead to queries and even penalties for under-declaration of income.
Optimise your retirement contributions to tax-deductible investment products such as a retirement annuity. Talk to your employer about structuring your remuneration package in a manner
Finally, ask for a copy of your assessment from your tax practitioner before the October 31 deadline. This is the only way to prove that your return has been submitted.
Efficient eFiling
If you’re still filing your return manually, it’s strongly advised that you register on the eFiling site and submit electronically.
Much of the information required on your return is already prepopulated. In most cases, your tax assessment is issued immediately upon submission.
Wouter Fourie is with Ascor Independent Wealth Managers
Taxpayers need to meet certain criteria and won’t necessarily be able to claim for every cent paid – tax specialist.
Tax practitioners have been caught by surprise after the SA Revenue Service (Sars) disallowed medical expense claims due to failure to submit the correct supporting documents.
Wessie van der Westhuizen at Willems & Van der Westhuizen, explains that medical tax certificates usually distinguish between contributions paid during the tax year and “claims not recovered from the scheme”.
Previously, Sars generally allowed a medical tax credit for “claims not recovered from the scheme” when individuals submitted their tax returns but this year, their experience has been that this credit is only allowed if taxpayers submit all the invoices and receipts related to the amount reflected on the certificate as well, he says.
While this is not an issue where taxpayers don’t have large medical expenses, it is a significant concern for some pensioners and taxpayers with disabilities in particular. In some instances, it can be the difference between a refund and having to settle a tax debt, he says.
Van der Westhuizen says taxpayers sometimes submit these invoices and the relevant proof of payment to their medical schemes and may not be able to retrieve these supporting documents for submission to Sars.
Independent personal tax specialist Bari Duvenhage says while Sars previously regarded the medical aid tax certificate as sufficient proof of claims not recovered by the scheme, there has been a sudden change in approach and it now also requires proof of payment.
Yet, this is generally only an issue in selected cases where medical expenses are quite high.
Taxpayers need to meet certain criteria and won’t necessarily be able to claim for every cent they paid towards medical expenses, adds Duvenhage.
Ettiene Retief, chairperson of the national tax committee of the South African Institute of Professional Accountants, says he is aware that certain practitioners have experienced this issue, but is not clear how common it is.
Retief says in the past, some taxpayers have abused the system with regard to qualifying medical expenditure.
Sars has become more wary of medical expenditure and has began to consider whether a specific taxpayer truly paid the expense and if it qualifies as a medical expense in terms of the tax rules.
In certain cases, taxpayers have previously tried to claim for things like toothpaste or similar items. “I think Sars is just trying to close that gap of potential abuse,” Retief says.
Sars did not respond to a request for comment by time of publication.
To allow more time for verification prior to the December holiday period, the 2018 tax season is shorter than usual. Nonprovisional taxpayers (most individual taxpayers fall into this category) have to submit their returns by October 31.
Sars has become more wary of medical expenditure and has began to consider whether a specific taxpayer truly paid the expense and if it qualifies as a medical expense in terms of the tax rules.