It’s tax season, which means it’s time to complete your annual return and claim all your allowed expenses – and hopefully qualify for a refund! We consulted SARS guidelines and spoke to several tax experts to find out what you can claim as a deductible expense.
Deductions you can claim on your tax return
Home office expenses
Includes: Office equipment and stationery, electricity, rates and taxes, interest on a home loan, levies, rent and cleaning costs.
How much: Actual costs for the office (chair, desk, printer ink) and a portion of general home expenses (rates, electricity, etc.) based on floor space – see our example below.
Get the info from: Invoices, receipts and/or bank statements.
You and your home office have to meet these criteria:
- More than 50% of your working hours must be spent in the home office.
- You must have a designated room in which you work. This includes a study used only for work, but excludes a seat at the dining room or home office also used as a school room or for homework.
- You must have a written agreement with your employer allowing you, or requesting you, to work from home.
So, for example:
- You work 150 days of a 250-day work year in your home office – more than 50% of your working hours.
- Your home office is 15m2 of your 150m2 home (10%) and is only used by you for work purposes.
- Your total house costs (levies, rent, electricity, cleaning, rates and taxes, interest on home loan) for the year are R200 000.
You can claim:
- Direct office expenses (telephone costs, stationery and repairs to office equipment) at full cost.
- 10% of the general house costs mentioned above.
You claim R40 000 as home office expenses, made up of:
Repairs to office chair
Home expenses (10% of R200 000)
Retirement savings contributions
Includes: Contributions to pension funds, provident funds and retirement annuities.
How much can I claim? Actual amount contributed up to 27.5% of your total income, or R350 000, whichever is the lower.
Get the info from: Your employee tax certificate and/or the tax certificate issued by your retirement annuity provider.
Includes: Medical aid contributions and any medical expenses paid out of your own pocket for prescribed medical care – not the vitamins or supplements or headache tablets bought off the shelf!
How much can I claim? For medical aid contributions you claim a medical tax credit for everyone on your medical aid. The amount is R319 per month for the first two medical aid dependants (such as you and your partner) and R215 per month for other dependants. You can also claim the costs of medical expenses paid out of your own pocket – but you will need proof that the medical care or medicine was prescribed for you.
Get the info from: Your medical aid tax certificate, copies of prescriptions, invoices from registered healthcare practitioners and receipts and/or bank statements.
Travel costs for business
Includes: Fuel, oil, repairs and maintenance, wear and tear (depreciation), licences, and Uber or Bolt fees.
How much: Actual costs for business kilometres travelled, or use the tables in the SARS eLogbook
Get the info from: Logbooks, receipts and/or bank statements.
Important: If you have a travel allowance and/or claim regular business travel costs you must keep a logbook with details of:
- Date travelled
- Distance in kilometres per trip
- Reason for travel
- Opening kilometres on 1 March 2020 and closing kilometres on 28 February 2021
- Your car, such as make and model
Includes: Donations made to registered public benefit organisations (PBOs), such as the Solidarity Fund.
How much: Actual amount donated, up to 10% of your taxable income.
Get the info from: Your PBO tax certificate or receipts showing the amount, date and PBO registration.
You can read more on deductions in the SARS Comprehensive Guide to Income Tax Returns, which includes examples.
Auto-assessments and deductions
SARS introduced auto-assessments last year for some taxpayers, and have said they will be auto-assessing more taxpayers this tax season.
An auto-assessment is when SARS automatically completes your tax return using information such as tax certificates from your employer, medical aid and pension fund. They then issue their auto-assessment, which will show that you are due a refund, have paid all you need to, or need to pay in additional tax. You can accept or reject the auto-assessment.
Auto-assessments make tax filing very convenient and quick. But our experts were unanimous: You should always, always check an auto-assessment because SARS might not have all the information on deductions such as donations or home office expenses – or even, in some cases, retirement annuity fund contributions. This means they may not have complete records and you may miss out on a refund.
And always make sure your personal details are correct, including your name, address, ID number and bank account – so any refund can be paid quickly!
Remember to keep records!
Apart from the all-important travel logbook, you also need to keep records such as invoices, receipts and bank statements (useful when receipts fade) that show when you paid expenses, and how much they were. And you must keep those records for five years.
Keep an eye on deadlines
Tax returns can be filed from 1 July to 23 November 2021. Provisional taxpayers have an extra few weeks and can file their return up to 31 January 2022. Remember to get your return in on time, and double check all the details. You can talk to your tax consultant, financial adviser or SARS for more information, or if you have any questions.