All you need to know about the tax filing season

For individuals, the 2016/17 tax filing season began on July 1, and all returns for non-provisional taxpayers must be completed and submitted by September 22 for manual submission, and November 24 if submission is done via e-filing. Provisional taxpayers have until January 31, 2018.

SARS will continue to focus on compliance, and has targets to meet, so it remains imperative to be accurate and timely, and above all, have your supporting documentation ready for submission even if it is not requested by SARS.

Medical deductions / Out-of-pocket medical expenses

Out-of-pocket medical expenses comprise qualifying medical expenses that were not recovered from the medical aid, but which were paid for by the taxpayer. Out-of-pocket medical expenses that are ‘payable’ cannot be claimed, but payment thereof in the consequent tax year, should qualify for deduction. SARS will ask for the supporting documentation for any out-of-pocket medical claims including receipts from the actual suppliers, copies of cheques (or any equivalent proof of payment) issued to the supplier, as well as any other documentation that confirms -beyond doubt – that payment was made.

Disability claims

Medical expenses not covered by medical aid can be claimed by those suffering certain types of disability. If a taxpayer, their spouse or qualifying children have been diagnosed with a disability by a duly registered medical practitioner and they want to claim deductions, they have to provide the following information among others:

• The date of birth of the qualifying person(s).
• The severity of the disability as per the ITR-DD.
• The date when the most recent Confirmation of Diagnosis of Disability (ITR-DD) certificate was completed.

1. Retirement Annuity Fund Contributions

If you want to claim deductions for retirement annuity contributions you made, you must provide the individual policy number(s) and the name(s) of the insurer(s) or fund(s) of each.

2. Travel claims

The need for documentation is also vital when making a claim for business-related travel in a private vehicle. Keeping an accurate logbook is not difficult but it needs to be ready to back up these claims. A logbook needs to contain the odometer reading at the beginning of the tax period and at the end, with each business trip logged by date, destination, purpose and number of kilometres travelled. SARS will always request a logbook as support of business travel if claimed by the taxpayer on his/her IT12. Therefore, don’t claim for business-related travel if you don’t have a logbook.

3. Secondary sources of income

Another important area of focus should be the proper recognition of genuine business expenses relating to secondary sources of income, such as rental property. A detailed bond statement is needed to ensure that only interest and administrative expenses are claimed in case of mortgaged rental property. In addition, all other expenses like repairs, wages, cleaning, insurance etc. needs to be backed by source documentation. Any tax refund caused by a rental loss will invariably lead SARS to request supporting documentation.

4. Reasonable care must be taken by taxpayers when completing tax returns

Section 223 (1) (ii) of the Tax Administration Act requires taxpayers, with the assistance of an accountant, to undertake ‘reasonable care’ when completing tax returns. SARS may impose penalties if it concludes that ‘reasonable care’ was not taken by the taxpayer when the relevant tax return was completed. ‘Reasonable care’ cannot simply be achieved by sending the applicable information to the tax practitioner and/or furnishing a disclaimer that all documents are true and valid. All transactions declared in the return need to be accurate, complete and be understood by the taxpayer and the tax practitioner.

5. Registered tax practitioners

When looking for an accredited and recognised tax professional, taxpayers should only consider tax accountants registered with a Recognized Controlling Body (RCB). Taxpayers can use the link below for a list of RCBs which can be contacted to confirm registration of any person claiming to be a tax practitioner.

6. Scams

Taxpayers are warned not to fall victim to tax identity fraud. SARS urged taxpayers to protect their taxpayer information, login name and password at all times.

SARS will never request a taxpayer’s banking details or personal details in any correspondence that they receive via post, email or SMS. SARS will not send them correspondence with hyperlinks to other websites – even those of banks, as confirmed by SARS.

Taxpayers who are concerned about emails or SMS messages claiming to be from SARS should email phishing@sars.gov.za or call the Fraud and Anti-Corruption Hotline on 0800 00 2870 or the contact centre on 0800 00 7277.

7. Tax chuckles

The latest income-tax form has been greatly simplified. It consists of only three parts:

1. How much did you make last year?

2. How much do you have left?

3. Send amount listed in part 2.

Courtesy: Carien Bennett.

Taxpayers that need assistance with submission of their income tax returns can contact 072 474 0094, 011 869 0261 or email wim@wjw.co.za

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