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Let your SARS Tax Refund Your Holidays

Finance • by Paul de Beyer • 10 December 2019
Tax – it’s almost everywhere! From roads to sugar, income to VAT, there seems to be a tax on everything. With all the taxes out there, it’s really important for all of us to know exactly how tax affects us and, most importantly, how we can get a little money back!

The financial year runs a little differently to the calendar year we’re used to: from March 1st to February 28th instead of January to December. Why this difference is important to consumers is that when you start to think about your tax, the amounts you’ll be looking at will fall between those dates.

As taxpayers, we end up paying tax on a bunch of things, but we also have a chance to apply for a refund on some of that tax paid. Here are five things you need to know about tax and how to get a tax refund:

1 When should I start paying income tax?

Tax is something all South Africans pay, but importantly, this applies to income tax. That’s tax on the money you make every month/year.
If you’re under 65 years, you would start paying tax if you earn more than R79 000 per year.
If you’re older than 65, but younger than 75, you would start to pay tax at R122 300.
If you’re older than 75, you would start to pay tax at R126 750.

2 How do I register for income tax?

Registering for tax can be a little daunting if you don’t know anything about it. Luckily, it’s a fairly straightforward process but does require a some time in a queue.

When you start earning above the thresholds mentioned above, you’ll be eligible to pay income tax.

Firstly, you’ll need to head over to your nearest SARS office and stand in line to register. All you need with you is your ID Book and proof of residence.
From there, you’ll be issued your SARS tax number – both via SMS and email – confirming your registration. This is your number for life and the one you’ll use to register for eFiling (the online tax refund service).

3 How do I pay income tax?

This is the big one, the main way you’ll be paying tax. As you earn money, you need to pay some tax on it. There’re various levels of income tax which increase the more money you earn.
If you’re employed by a company or person:
You’re classified as a provisional taxpayer.
Your employer will take care of the hard part for you by taking a PAYE (pay as you earn) amount from your salary each month and pay it to SARS on your behalf.
This amount is dictated by what tax bracket you fall into, the amount increasing as you go up into the next tax bracket.

If you’re self-employed:
You’re classified as a non-provisional taxpayer.
Your tax is a little different as you’ll need to estimate how much money you’ll earn in the year, apply the appropriate tax table to that amount and then paying that amount upfront to SARS.
If you under-estimate how much you need to pay, you might be forced to pay a fine.
If you overestimate how much to pay, you can then claim that money back after you submit your tax refund.

For non-provisional taxpayers, the cut-off date to complete your tax refund is Dec 2019. For the provisional taxpayer, it’s January 2020. That means that you have a little time left to grab your “bonus” cash before the end of the year!

4 Why should I do a tax return?

Technically, you don’t have to do a tax return at all unless you earn more than R500 000 per year. However, if you don’t do a tax return, you won’t be eligible for a tax refund – and that means no potential bonus for the holiday season!

The aim of a tax return is to ensure that you’ve paid the correct amount of tax to SARS and allow you to claim back certain expenses. Depending on a variety of factors, you could be due a refund or have to pay a little extra money, especially if your income fluctuates over the course of the year and/or comes from multiple sources.

As a taxpayer, you can claim back certain expenses, getting you a return on taxes paid. When you do your tax return, you could claim back some funds from:
Retirement savings products like a Retirement Annuity (RA), pension or provident fund. Please note that most pension and provident fund savings are built into your PAYE and the refund is reflected monthly. If you’re contributing to an RA, you can claim a certain percentage back on the amount you’ve saved when you do your tax return.

Medical aid contributions, with a percentage of contributions refunded to you.
Extra medical expenses you incurred that were either not covered by your medical aid and insurance or you had to pay over and above what your medical aid or insurance paid out.

Certain expenses that are regarded as deductible include:
legal costs (situation dependent);
use over time (wear and tear) to certain assets;
charitable donations to approved bodies; and
some debt payments that might be related to your employment.
To get the best understanding of your tax deductables, we recommend speaking to an expert.

5 What is a tax scam and how should I avoid it?

Like most things in life, some people will try to exploit the tax system. These exploits may include trying to cheat by not paying enough or even go as far as to falsely position themselves as SARS employees.
Be very careful when replying to or engaging with anyone saying they are acting on SARS’s behalf.
Never give your banking details or personal details – SARS will never request your banking details over email or SMS.
If you have any queries, go onto the SARS website or contact SARS directly.

If you’re an existing Creditgenie member or are considering joining, you’ll have access to a financial expert who can help you understand certain elements of your tax and advise you on what kind of professional tax help you might need.
You’re also eligible to use the Legal & ID Assist service that gives you access to a qualified legal representative if you’re ever a victim of a fraud scam. If you’re interested in joining Creditgenie, click the link.