Ricochet News

3 tips which may get you a tax refund

By Patrick Emmett – Senior Tax Consultant, Mazars Port Elizabeth - Jun 22, 2018
3 tips which may get you a tax refund

In our previous articlewe outlined 5 easy steps to make filing your 2018 tax return as simple and painless as possible. To recap, these were:

  1. Do you need to file your 2018 tax return?
  2. Get your eFiling login details ready
  3. Get supporting documentation ready
  4. Remember to declare all income from other trades; and
  5. If stuck, seek help

In our article this week we delve in further detail into the actual process of completing your tax return and provide 3 tips to claim deductions or allowances which may result in you receiving a tax refund from SARS.

  1. Deductions and allowances available to salaried employees

Employees, other than commission earners which we deal with seperately below, are severely restricted in the deductions that they can claim in order to reduce their tax liability. There are however, a few lesser known deductions and allowances that are available to individual taxpayers, which we outline below:

  • Any legal expenses which the taxpayer incurs in relation to their employment, provided it is not of a capital nature;
  • A wear and tear allowance on assets owned by the taxpayer which are required to be used by the taxpayer in their employment; and
  • Any rent, cost of repairs or expenses in connection with their dwelling, or a portion thereof, which is required to be used by the taxpayer in their employment (for instance a home office where you spend more than 50% of your time working).
  1. Deductions and allowances available to commission earners

Unlike salaried employees, commission earners are not restricted with the types of deductions or allowances which they can claim. Accordingly, a commission earner may thus claim any deduction or allowance available in terms of the Income Tax Act, No 58 of 1962 (the Act), against their commission income provided such expense or asset, subject to an allowance, is incurred or used directly in earning the commission income.

As an aside, a commission earner may approach SARS to issue a tax directive indicating the rate of tax to be withheld by their employer, which is calculated based on their past taxable income. This however, is not a final payment, but merely reduces the amount of PAYE withheld by the employer on a monthly basis.

  1. Deductions and allowances available against other trade income

Where a taxpayer earns income from any other trade, for instance the letting of a residential property, they are entitled to claim any deduction or allowance available in terms of the Act against the trade income. In relation to rental income, a taxpayer may for instance claim the repairs and maintenance, rates and taxes, water and electricity, and interest paid on the bond over the property.

We caution though that in claiming any of the above deductions or allowances that you should have the relevant documentation and / or calculations in support of any amount claimed. The onus rests with the taxpayer at all times to show that any amount claimed is allowable.

Mazars Port Elizabeth are here to help you should you require any assistance in assessing whether you qualify for the above deductions or allowances, or in completing your tax return. For enquiries, please contact our Tax team at PLZ.TaxConsulting@mazars.co.za