Who Qualifies as A Provisional Taxpayer?

You qualify as a provisional taxpayer if you earn money that SARS is not aware of. In other words, you are not earning a monthly salary from which tax is deducted by your company and you are supplied with an IRP5.

You could fall into this category if you are a landlord, you run a small business or are a freelancer and if you have investments.

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SARS Raises Tax Return Threshold from R350,000 to R500,000

SARS announced its rules and regulations for the 2018/2019 tax year at a recent briefing. The tax return threshold has been raised from R350,000 to R500,000.

Until this announcement, people earning less than R350,000 a year could qualify to not to have to file a tax return. This threshold now sits at R500,000. People who make less than this amount each year no longer have to submit a tax return.

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When Tax Becomes A Turning Point for People to Stay or Leave

The working class of South Africa are under pressure and for many of them, the situation in the country is not helping either. The economy is but a shadow of what it used to be and many believe that won’t change for the better any time soon, if ever.

With all the corruption and misspent tax money, it shouldn’t come as a surprise that those who have the means to emigrate are acting on those impulses more and more. After all, it is their tax money that is footing the bill for all the issues.

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What Is Financial Emigration?

The South African financial situation is volatile, to put it mildly. Markets are makings more turns and dips than a meandering road and investors are anxious.

The locals aren’t at ease either. In recent years there has been an increase in emigrants from the country due to the uncertainties and many South Africans, who are already working abroad, has a new headache to deal with.

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Bitcoin and Cryptocurrency Earnings – SARS is Coming for You

Bitcoin was the subject of many a conversation at the weekend braais all over the country last year. A number of people invested early in Bitcoin and excitedly told their friends they had to invest too.

Others woke up a bit late and were sorely disappointed when they invested and made some devastating losses. What many people did not think about while they were caught up in a frenzy, was how SARS regulates cryptocurrencies.

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Failing to File Tax Returns is A Criminal Offence!

There are some people who are unaware that you can get a criminal record if you don’t file a return. The only exemption is if you earn under a certain threshold – check with SARS or your accountant. However, even in this case, tax accountants advise that you still file a return.

It could be that you have been filing returns and have reached pensionable age or are unemployed. In this case, if you or your tax accountant are still getting returns mailed to you or them, it is best that you mark the return as a “NIL RETURN” and mail that to SARS.

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What Can I Deduct for Tax Purposes?

Here are four ways that you can save with tax deductions:

  • Medical scheme shortfall payouts. Taxpayers can claim deductions for their contributions to medical schemes, and you can also claim for out-of-pocket payments for medical products once your savings have dried up.
  • Retirement Annuity claims. If you make payments towards a pension, provident fund or retirement annuity, you can claim deductions on taxable income. If you donate to a public benefit organization, you can also claim against taxable income.
  • Tax-free investments. if you have participated in a tax-free investment, interest earned is exempt from tax. Other investments could be partially exempt – up to R23 800 exemptions for those below 65 and up to R34 500 exemption for those older than 65.
  • Travel claim. If you use your vehicle for work and you can prove to Sars that a portion of your travel expenses are for work, then you can claim for that. Sars has a tracking device that you can plug into your cigarette lighter space in your car, so you don’t have to keep log books any more.

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How To Manually Calculate Your Tax

It’s easy to calculate how much tax you must pay. Calculating annual tax deductions and tax liabilities for an assessment year can be done in some simple steps. Calculate your total taxable income and then apply the tax rates relevant to that particular financial year.

Computing your tax liability might be complex if the steps involved are too many. If the income is above a particular figure or in case the income is from multiple sources, things can get tricky.

In this case, it’s advisable to have professional assistance. A CA or a professional tax specialist can handle complex situations in a better way. Tax filing is a sensitive matter and it’s always a better idea to seek help.

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