It’s crazy how quickly the year flies by. It seems that we’ve just finalised our last tax returns and now it’s time to start getting our affairs in order again.
The tax season for individuals will only open in July sometime but are you really going to remember all the relevant details then? Why not get all your financial and tax details sorted out now so that you’re all ready and waiting for the tax season to open and can submit it without the usual stress?
Remember that the period is 1 March 2018 – 28 February 2019
List all financial events
Make a list of any financial events that could have an effect of your taxes. Think about:
- medical expenses
- changing jobs
- buying / selling of a property
- any inheritance
- and anything that you feel may have a tax implication
It’s not important at this point to know exact consequences or whether the events even relate to taxes. Just make a list to remind yourself of things to look at or questions to ask your tax adviser (if you have such a person).
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I like to keep this list as a note on my phone and update it periodically throughout the year.
Look at all income
This should be easy to do if you are employed full time. Your company will issue you with an IRP5 somewhere between April – June (or even later depending how well organised they are). If you’ve changed jobs within the tax year you would need your IRP5 from both companies.
You don’t actually need the physical IRP5 certificate anymore as employers submit the details electronically but it is useful to double-check the details.
Also consider any income derived from freelance jobs, side-hustles or businesses that you run. This relates to all money that is paid directly to your account so even if you consider your side-job to be a business, unless it’s registered as such and has a separate bank account the income will be taxed in your personal capacity.
If you receive lots of payments from multiple sources you should consider exporting your bank statement to Excel and simply look through the “deposit” column.
Medical expenses can quickly add up and it’s good to keep track of all expenses not covered by your Medical Aid or Gap Cover. There’s a specific tax code for this so it’s good to have the details and receipts ready. Have a look at how the medical tax credits work.
What qualifies as out-of-pocket medical expenses?
These are amounts paid and not recovered during the year of assessment in respect of you or any dependant, and include:
- Services rendered and medicines supplied by any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopaedist;
- Hospitalisation in a registered hospital or nursing home;
- Home nursing by a registered nurse, midwife or nursing assistant, including services supplied by any nursing agency;
- Medicines prescribed by any duly registered physician (as listed above) and acquired from any duly registered pharmacist;
- Expenditure incurred and paid outside South Africa in respect of services rendered or medicines supplied which are substantially similar to the services and medicines listed above;
- Any qualifying expenses prescribed by the Commissioner as a result of any physical impairment or disability.
Vehicle log book
If you claim travel expenses then you need to ensure that you keep a log book of all travel. This really needs to be done “real time” as and when you travel as making something up after the tax year is not only really hard, it’s also not very ethical. Best to keep this up to date with an actual notebook or an app on your phone.
Make a list of all investments
Finally keep a spreadsheet detailing all your bank accounts and investments. You can use this when determining what tax certificates you need. It’s also useful to share with your spouse in case of some awful event.
Small bits of admin here and there during the year can save you many hours of confusion and stress at the end of the tax season. Getting you tax affairs in order now can also assist you in submitting your tax quickly and getting it done without stress. You can read this post to check whether you need to submit a return and check this out for everything you need to know about tax!