Getting a much-deserved tax refund could give you the extra boost you need to fund your child’s education or save for a holiday, writes Angelique Ruzicka
Taxpayers submitting their returns each year are often unaware of various deductions available to them, which lower what they owe to the South African Revenue Service (SARS). Here are some of the top things you can claim for:
According to Marc Sevitz, director and chief financial officer of TaxTim, a full year of contributing to a medical aid could get you a refund of over R3 000 each year.
Make sure that when you are donating to registered charities you get an 18A Tax Certificate, which you can use to inform SARS that you donated money. ‘SARS allows up to 10% of income to be claimed in a year in the form of donations to registered charities,’ says Sevitz.
Specific retirement products are tax-deductible. In other words, the more you save towards retirement, the less tax you pay. ‘Whatever you put towards a retirement annuity, pension or provident fund comes off what you’re taxed on. For example, if you earn R500 000 a year and contribute R50 000 to your retirement fund, you’re only taxed on R450 000,’ says Tracy Jensen, chief operating officer at 10X Investments.
A person who has, or whose spouse or child has, a disability is entitled to claim certain benefits in the form of an additional medical-expenses tax credit. ‘The disability must first be diagnosed by a registered medical professional. This is done by way of filling out an ITR-DD form. The form must be completed by you and a registered medical professional qualified to express an opinion on your disability,’ says Cherine Mac Pherson, an accountant and owner of The Bookkeeping Company.
If you work from home
If you run your own business from home, then there are more opportunities to claim a refund. ‘Any expenses genuinely incurred in doing work can be claimed – parking, petrol, entertainment, etc,’ says Paul Slack of Fasttrac Financial Services. Expenses associated with the home office can also be deducted. ‘You can claim a pro-rata share of property expenses for tax. The proportion is the percentage that the office area is to the total house area (m²). We usually work on about 10%. So the following would be included: bond interest, home insurance, domestic worker, electricity and water, security, etc. Then a proportion of things like cellphone and motor-vehicle charges are claimed (usually about 70% because some of the costs are deemed to be personal).’ Don’t forget to claim depreciation for your computer or any other equipment you’re using for your home office. ‘You can usually claim at one third per annum,’ says Slack. ‘There is also ADSL, ISP provider costs and other computer expenditures that can be claimed.’
This article first appeared in the April 2018 issue of Club magazine.