Advice to Help You Save on Taxes
Every year, amendments regarding tax regulations are introduced to make it even more difficult for fraudsters in South Africa to find loopholes in the tax system. Instead of trying to outsmart SARS, and ending up on the wrong side of the law, seek advice from SARS-registered tax practitioners. The tax advice will help to legally and ethically minimise your tax exposure. Optimising on allowable deductions is far better than looking for loopholes.
One piece of advice that can help ensure tax savings is that you should save. True, in a time when it is hardly possible to save because of high living costs, it may sound far-fetched, but if you can manage to invest a bit of your income, you can benefit from investment growth that is free of capital gains tax and tax on interest earnings.
How? It is a government investment initiative that encourages the saving of money after tax. Accordingly, you are allowed to invest as much as R33 000 per annum, free of capital gains and interest tax. The threshold is R500 000 over your lifetime. This means it is worth your while to start saving money to invest wisely.
Another piece of advice worth following is that of timely purchasing and selling of assets. No South African individual taxpayers have to pay capital gains tax on the first R40 000 capital gains for the particular tax year. If you thus invest wisely, and sell your unit trusts or other types of growth assets just before the tax year ends, you are able to benefit from the annual capital gains exclusion.
Tax advice that can help you avoid paying penalties, or face audits, is that you should accurately calculate your liability, keep all vouchers and records related to any type of deductions, and make sure that whatever you deduct is allowed.
One such an allowable deduction is that of home office expenses if you are a full-time employee working from home. Make sure you have a letter from your employer stating that you work from home before you deduct home office expenses. A percentage of your monthly rent on the property can, for instance, be deductible from tax. Be careful though, since you cannot start to deduct every type of expense in order to save on taxes. Best advice – seek guidance from experienced tax consultants on how to calculate and submit any such deductions.
Use our affordable services to ensure timely, accurate, and legislative-compliant tax returns this coming tax season.
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.