At the end of the tax year, are you that person going through piles of till slips in a crazy panic, looking for any that relate to work expenses? Do you call everyone in a state, demanding the tax certificates for your income protection policies and retirement annuities? Or, do you give up on claiming expenses because you simply haven’t kept track of them?
If this is you, you’re not alone. Doing an income tax return is ranked right up there on the list of adult responsibilities we’d all rather not have – but as the saying goes, taxes are as unavoidable as death.
Since you can’t get away from them, it’s not a bad idea to get yourself as organised as you can, as early in the tax year as possible, so that doing your return is as painless as it can be. The time to start is right now – March is the first month of the tax year. So make your new tax year’s resolution today: to keep your documents in order from the first month so that filing your tax return is a breeze.
Make files, boxes or spaces for slips and invoicesThe first step is to get organised. Work out the areas in which you spend tax-deductible money from month to month (we’ll go into these in more detail later), and create a space to save all your slips or invoices. A good system is to have a section in your wallet or handbag where you store things immediately and then do a weekly clean-out into files or shoeboxes that you keep in your office. If you’re really organised, you’ll then do a monthly filing session to make sure it’s all in order, but even if you don’t, at least everything you need will be in one place.
The expenses you can claim for (and slips you should keep):
Depending on the type of employee you are, you can claim for the following expenses (bearing in mind that your salary slip has to state what type of employee you are):
|Office services and rent**||X||X||X|
*You have to be able to prove that you have and use a home office or rent office space
** Based on floor space as a percentage of overall household floor space if you work from home
*** For self and dependants, not covered by medical aid
Visit the SARS website for a full list of the expenses you can claim for.
Make a note of all the income tax certificates you’ll needMost of your insurance providers will send you your income tax certificates well before the start of tax season. Make a folder on your computer desktop for electronic versions, or a space in your shoebox for those that are mailed to you. Be aware of those that you can claim for so that if you don’t receive them, you can follow up. You can claim for:
• Medical aid contributions
• Income protection contributions
• Retirement annuity and pension fund contributions
Start a filing system or electronic record for your proof of incomeIf you earn a different amount each month or work for multiple clients, you will need a similar system to keep track of your various invoices and payments. Clients don’t always provide reliable payslips, so it’s best to keep a record of how much you bill each month and then make a notation when it’s paid.
Start your travel log bookIf you receive a travel allowance or are self-employed, you are entitled to claim for the costs of business travel. But you have to be meticulous about keeping a record of the distances covered and the purpose of each journey.
As a starting point, you need to note down your odometer reading on 1 March of every tax year. Then, every time you travel (for leisure or business), you need to note the opening odometer reading, the distance covered and the closing odometer reading. It’s annoying admin, but if you keep a notebook in your cubby hole and do it every time you come to a stop, it’s an easy habit to get into.
There are a number of online forms, apps and gadgets that will do most of this for you, but be sure to double check the SARS requirements to make sure that you are filling in all the necessary fields.
Get started right awayIt’s very easy for your tax records to get out of control. The only way to stop this from happening is to be organised from the very beginning. Use this list to start your system, so that by this time next year, your tax return just falls into place.