Four Ways You Can Save on Individual Tax This Year
Having professional accountants or tax consultants to complete, calculate, and submit your individual tax returns will help you to save money at the end of the day. Apart from ensuring compliance with the requirements for individual tax returns, the professionals also know what you are entitled to claim. Timely and accurately completed returns will help you to avoid the unpleasantness of a SARS audit.
To help you get started on aspects where you can save on your individual tax, let us consider some of the savings, which you might have missed until now.
- Retirement Annuities
Did you know that you are allowed to deduct up to 27,5% of your annual taxable income for retirement annuities made before the 28th of February? Of course, there is a cap of R350 000 per annum. However, if you have not yet considered your retirement provision, now is the time to speak to a professional tax consultant, accountant, or financial planner, if you want to save on individual tax.
- Tax-Free Investment Is Possible
Make use of the tax-free investment opportunity, introduced in 2015. The government introduced the product to encourage after-tax savings. If you have done so, you will have reason to look forward to the submission of your returns as you are allowed to invest R33 000 every year and benefit from the interest without having to pay income tax, capital gains, or dividends tax on such. There is a cap of R500 000 over the full lifetime of the individual. With such, you can now invest a portion of your income after tax, without being concerned of having to pay tax on the growth of your investment.
- Exemption from Capital Gains Tax (CGT)
Did you know that you are also entitled to CGT exclusion of R44 000 on capital gains earned for the particular tax year? Speak to our tax consultants about the exemption and how it can be used to ensure savings regarding your next individual tax returns.
- Charity Contributions
You can either pay taxes on the income earned or choose a registered Public Benefits Organisation and save on taxes. Indeed, you can deduct up to 10% every year for donations made to such charities. Remember to keep proof of such in the form of a section 18A certificate, which the receiving organisation must provide for your donation. Any donations over the threshold can be carried over to the next period.
The above are just four areas in which you can benefit from tax savings if you make use of our professional consultants to help with your individual tax returns. Give us a call and also benefit from our guidance regarding other areas of allowable savings.
Disclaimer: This article is for information purposes only and does not constitute legal, tax, or financial advice. Call on us for professional legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing – September 2018.