Efiling Season 2018
Hi, my name is Wim Wolmarans, and I am a registered tax specialist. I will be running a serious of articles relevant to the current tax filing season to assist taxpayers and hopefully add some value and insight.
For individuals, the 2017/18 tax-filing season began on 2 July 2018, and all returns for
non-provisional taxpayers must be completed and submitted by 21 September 2018 for manual submission and 31 October 2018 if submission is done via efiling. Provisional taxpayers have until 31 January 2019.
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.
1. Medical deductions
Out-of-pocket medical expenses
Out-of-pocket medical expenses comprise qualifying medical expenses that was not submitted to, nor recovered from the medical aid, and which was 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 such as, receipts from the actual suppliers; copies of cheques (or any equivalent) issued to the supplier, and any other documentation confirming beyond doubt that payment was made.
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
2. 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. Although retirement fund contribution information is pre-populated on this year’s IT12, tax certificates must still be available for submission to SARS on request.
3. 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 must be available on request that supports the claim. 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.
Also note, that fuel expenses borne by employers n regards to employees that received travel allowances technically disqualifies the employee to claim business kilometres against allowances. SARS has allowed this in many cases so far, but it is my opinion that they will start clamping down on these type of double deductions in the near future.
4. 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.
5. 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 needs to be accurate, complete and be understood by the taxpayer and the tax practitioner.
6. Registered tax practitioners
Looking for an accredited and recognised tax professional Taxpayers should allow only tax accountants registered with a Recognized Controlling Body (RCB). Taxpayers can use the link below for a list of RCB’s which can be contacted to confirm registration of any person claiming to be a tax practitioner.
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 firstname.lastname@example.org or call the Fraud and Anti-Corruption Hotline on 0800 00 2870 or the contact centre on 0800 00 7277.
8. 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.
Taxpayers that need assistance with submission of their income tax returns can contact me at:
Cell: 072 474 0094
Office: 011 869 0261