July arrived, and with it, tax return filing season. While many people would prefer not to think about it, ignoring your return or not carefully checking your auto-assessment could cost thousands.
“Tax is the largest annual expense for most South Africans. It’s bigger than rent and groceries, bigger than almost anything in their budget, yet most people never think about optimising it,” says Alex Cook, Chief Executive Officer of financial wellness fintech Wealthbit.
Tax Season Made Simpler
The difference between letting the South African Revenue Service (SARS) do its calculations and really getting to grips with your tax position can amount to tens of thousands of Rands a year.
“Bear in mind that money does not disappear; it either goes to SARS or it stays with you, where it can compound towards your future,” says Cook.”
Yet, for most South Africans, tax is a part of life they don’t question: the various deductions (pension, medical aid, etc.) come off when their salary comes in, and once a year they get an unexpected windfall or an unwelcome bill. Beyond this, the subject feels both vague and complicated.
A Guide to Avoid Overpaying
In assessing what you might owe or be owed, the following rules are taken into account in terms of tax collection in South Africa:
How you earn (salary, freelance or commission income, or a mix).
How your income is structured (sole employment versus a side business, for example).
What you contribute (retirement funds, medical aid, tax-free savings).
Which benefits and credits apply to you (medical tax credits, retirement deductions, rebates).
“You need to fully understand all these moving parts to fully assess whether your current tax setup is beneficial or you are, in fact, leaving money on the table,” says Cook.
ARTICLE COMPILED BY ANGELFISH PR AND EVENTS.
