The 2009 tax filing season went live on 1 July and to avoid punishing fines or penalties, individuals need to know what is required of them and be aware of the deadlines they have to meet.
Grant Lloyd, MD of payroll, tax and HR software developer Softline Pastel Payroll, urges individuals to start getting their documents in order now.
“Obtain proof of contributions to Retirement Annuities or private pensions and medical schemes, investment income, dividends and lump sum payments now. The quicker this information is obtained the quicker the return can be finalised and that panic last-minute rush avoided.”
The following is Lloyd’s recommendation of what to do to ensure a pain-free tax return experience:
* The first step for individuals is to establish whether or not they have to file a tax return. People who earned less than R120 000 (R10 000 a month) between 1 March 2008 and 28 February 2009 from a single employer and who have no additional earnings to declare or deductions to claim, do not have to submit an IT12 return for 2009.
* For those who earned more than R120 000 and have to file a return, the deadline is September 18 if the return is being done manually, but those who have access to an internet connection and choose to submit electronically gain an additional six weeks up to 20 November.
* A manual return pre-populated with the individual’s tax certificate information submitted by the employer can be requested from the local SARS branch or obtained by completing a return request form that was posted to all non-eFiling taxpayers last month. SARS eFiling users can simply log on to the website to verify and complete the pre-populated IT12 return online.
When completing their tax returns, individuals can claim certain deductions against their taxable earnings. These include medical expenses, retirement annuity contributions, business kilometres travelled if a travel allowance was received, business travel expenditure against subsistence allowances and donations to an approved charity or NGO.
Lloyd adds that taxpayers should be aware that this 2008-2009 return will be their last opportunity to submit claims against a travel allowance without a detailed logbook as proof of business trips made using a private car.
“Currently, a maximum of 32 000 kilometres can be claimed of which the first 18 000 kilometres is regarded as non-business travel. So a taxpayer with a travel allowance who travelled more than 32 000 kilometres in this financial year but did not keep a detailed logbook, will be allowed to claim a total of only 14 000 kilometres for business purposes against the travel allowance.
”Taxpayers must make sure that they claim their business kilometres this year or SARS will recover tax on assessment from the 40% of the travel allowance that was not subject to PAYE (employers are obliged to deduct PAYE from only 60% of the value of travel allowances).”
Finally, Lloyd says taxpayers should have started to record their business travel details from 1 March 2009 as they will not be able to submit any claims against a travel allowance without a detailed logbook after 28 February 2010.