BUSINESS NEWS - The 2015 tax season is well underway and while certain income earners are exempt from submitting tax returns, it may be in your favour to submit a return voluntarily if you contribute towards a retirement annuity.
"Retirement annuity contributions qualify for tax deductions, so remember to take advantage of this attractive tax benefit when you submit your return," says Annemie Nieman, legal technical adviser at PSG.
The new tax year opened on 1 July and with it, the rush to gather the necessary tax certificates and documentation.
Double check that you
don't have to file.
Those excluded from having to submit a return are South Africans who earn an income from only one employer and who earned less than R350 000 for the period from 1 March 2014 to 28 February 2015. To qualify, you should also:
- Not have conducted any trade for the financial year
- Not have received any travel or accommodation allowances
- Not have had a capital gain or loss of more than R30 000
- Not have received interest of more than R23 800 (for taxpayers below 65) or
- R34 500 (for taxpayers 65 and over) from a South African source
- Not have any assets abroad
"If you fall into this category, you are correct in thinking that you do not have to submit a return. However, by not submitting, you give up the opportunity to claim back some of the tax you have already paid to the South African Revenue Service (Sars)," says Nieman. In many cases, taxpayers are unaware of the qualifying deductions that they can claim back. "This can even apply to those who earn more than R350 000 a year and have to submit tax returns in any case."
Your contributions to a retirement annuity qualify for a tax deduction, but only if you submit a return.
"The tax deduction can be quite substantial," she says. For example, a 35-year-old taxpayer earning a salary of R340 000 per year would pay tax of R63 384 for the 2015 tax year if no deductions are claimed.
R30 000, the tax payable would reduce to R54 084. That is a reduction in tax and a reimbursement from Sars of R9 300 for the year."
Although it might sound like an enormous task, a basic return can be submitted within a matter of minutes using eFiling. Taxpayers who are not fully comfortable completing their tax return online but do not feel up to travelling to the Sars offices (and sometimes waiting in long queues), can contact the Sars eFiling call centre on 0800 00 7277.
A trained consultant will help you file your return electronically. Alternatively, you can download useful Sars guides on how to complete individual tax returns from their website.
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