If the word tax makes your head hurt, you need to read this
Tax claims, a buzz word that can be heard in every corner of the office, is a tricky subject that leaves many people in a cloud of confusion.
How do you claim from your taxes properly?
How much should you be claiming for?
How much do you need to earn to claim from taxes?
What is efiling and how can it be used correctly?
What are tax claims anyway?
The thought of giving your money away is never comforting and being uncertain of why you are doing it in the first place can make the process that much more difficult.
To understand how you can get the most out of your tax claims, you need to first understand the basics of taxes. In South Africa, anyone who is under the age of 65 and earns R78,150.00 or more per year is required to pay taxes. It is a misconception that tax deductions are claimed against salary because tax deductions are actually claimed against personal expenses such as medical aid, retirement annuity or non-profit contributions. “What many people do not fully understand is that tax deductions are claimed against your personal contribution, not according to how much you earn,” said Darren Sheer, executive manager at Solace Benefits.
There are no cheat sheets when it comes to taxes, the only way to get around them is to pay them –correctly. Having said this, there are some honourable ways to reduce your tax bill. Contributing to retirement annuities, pension, and provident funds can help you reduce your tax bill by up to 27.5 per cent. For high tax payers, donating money to registered NGO’s is another way of reducing tax bills. Tax money goes towards fixing our roads and other government dependant activates, however, if you prefer to donate your money to a cause of which you are passionate, then donating money to a registered charity of your choice will help you reduce your tax bill and will put your mind at ease because your money is going towards a cause that you believe in.
There are certain provisional allowances for items such as travel expenses but when it comes to submitting your returns, you may be audited and asked to provide proof to justify these expenses, such as a log book. “What this does is allows the individual to be taxed less on their salary as a portion of the salary has already been allocated to the expense,” said Sheer.
“Tax season is as consistent as the four seasons each year, which is why most people who use our tax services are repeat users. They have used us before and depend on us every year,” said Sheer. There are many questions surrounding the subject of taxes and how you can go about dealing with them in the most effective manner. Solace Benefits have the answers to these questions and are available to answer any queries regarding taxes in South Africa. If you are looking to find financial assistance or are simply looking to deepen your understanding of taxes in South Africa, send Solace Benefits a question today and you will be put into contact with an expert in the field, free of charge.