The 2022 Filing Season for Employers came to an end at the end of May and 1 July marked the start of tax filing season for individuals. Most taxpayers will be “auto assessed” due to not having complicated structures and/or they may even have a single tax certificate.
It’s imperative that these “auto assessments” are scrutinised and not to simply accept the “auto assessment” if there are discrepancies. This will allow for the opportunity to engage with SARS and/or submit further information to support requests for tax refunds. All taxpayers must please double-check information before submitting tax returns.
Here are a couple of important notes and tips for the 2022 tax filing season for individuals and employers to take note of:
You could forget to include something on your tax return and not be eligible for a refund, so we’ve tried to put together a comprehensive list of items to keep in mind, from filing and automatic assessments to deductions and objections, we have all the information you are likely to need regarding filing your tax return.
Here are 10 tips to help you navigate the 2022 tax season:
Ensure you have a tax number & SARS eFiling profile
No need to worry if you have not signed up for SARS eFiling or if you do not have a tax number; SARS have made things much simpler over the years.
Obtaining a tax identification number is as simple as signing up for SARS eFiling. If you do not already have a personal income tax number, go to https://www.sarsefiling.co.za/, and SARS will assign one when you register.
To get a tax number, you must possess a South African ID.
Ensure your bank details are up to date
You can update your bank details online via your SARS eFiling profile.
To update your information, you might need to schedule an appointment with SARS. Please note you do have to schedule an appointment before arriving at a SARS branch.
To prevent a delay in your refund, (or worse, risking it being paid into the incorrect bank account), it is best to ensure that your banking details are updated before you file your return.
Ensure your contact details are correct
Verify that SARS has your correct contact information, including your physical address, contact numbers, email address etc.
You can accomplish this by using the menu options “SARS Registered Details” and “Maintain SARS Registered Details” on the SARS eFiling platform.
Check your tax compliance
Make sure that all your past tax returns have been filed and that you have no unpaid SARS fines or outstanding tax owing.
Your refund for the current year may be delayed if you owe SARS any money from previous years or if your previous assessments have not been completed.
Get your documents ready
Here is a list of 6 of the most common documents you require in order to start filing your tax return:
- IRP5/IT3a from your employer/retirement fund
- Medical aid certificate
- IT3b/IT3c detailing your investments
- Retirement annuity certificate
- PBO certificate showing your donations
- Travel logbook for business travel
If you changed jobs, withdrew or transferred from your retirement fund, you should obtain an IRP5/IT3a from your employer or retirement fund. This document must be included in your tax return.
If you are self-employed, ensure you keep proper financial records
If you own your own business, you can deduct all business-related costs from your revenue.
This group of taxpayers includes sole proprietors, commission earners, independent contractors, and freelancers.
Ensure you keep an accurate record of your income and expenses, alongside the related receipts and invoices. SARS may not allow you to claim back your expenses if you cannot provide adequate supporting documents.
Determine if you can claim home office expenses
If you primarily work from home, check to see if you qualify to claim a home office deduction.
Understand the risks associated with the SARS auto-assessments
SARS may contact you via SMS in July to auto-assess your taxes. Instead of simply accepting the auto-assessment, we urge you to check all information.
Not simply accepting could prevent you from losing out on a tax refund. With the auto-assessment, you cannot claim tax deductions for items such as charitable contributions, home office expenses, wear and tear on assets etc. It won’t cover any further medical costs or expenses you have paid for out of pocket.
Avoid getting scammed
Sadly, scammers are getting more skilled, and it is now routine for taxpayers to get emails posing as SARS, announcing a tax refund, and asking for your banking or login information to complete the payment.
You can check the SARS website for the most recent information on any new scams, but keep in mind that SARS would never ask for your financial information via email or SMS and when in doubt don’t click on any links received via SMS or emails. Always consult SARS eFiling by logging in and checking SARS correspondence.
Plan to start early
The best course of action is to file your tax return as soon as possible during tax season. There is a danger that if you wait until the last minute and encounter a problem (say, you are missing a tax document), you will miss the deadline and be subject to needless SARS fines. Recently, they have become tighter with these!
Important Notes on Medical Expenses and Retirement Fund Contributions
Retirement Fund Contributions
- If you have contributed to a retirement vehicle and did not receive the tax benefit during the year, you are within your rights to claim the deduction when doing your tax return; confirmation of your contributions will ordinarily be sent via the retirement company you have contracted with, and this information should also have been received electronically by SARS;
- this saving could be quite significant, and as such must be checked before submitting a tax return or simply accepting the auto-assessment.
Medical Expenses
Did you have medical expenses during the 2021/2022 tax year that wasn’t covered by your medical aid scheme? Here’s some important information and notes around medical expenses to keep in mind before finalising your tax return:
- If your medical aid scheme did not cover certain medical expenses you may well be entitled to a deduction, provided those expenses are deemed as “qualifying medical expenses” and also, taxpayers should claim all medical expenses, even if the medical aid scheme does not cover the expense;
- remember that the medical aid scheme provides a certificate of contributions each year for tax purposes, which includes a schedule of all expenses not covered/reimbursed, so it’s good practice to at least have these non-refunded expenses logged;
- it’s quite possible that some expenses that you did not expect to be allowed by SARS, are in fact allowed which could result in a welcomed tax refund.
When in doubt, seek the advice of a professional, mistakes can have expensive penalty consequences.