PSIber Group (Pty) Ltd

SARS increases the annual earnings limit for tax return submissions.

SARS recently announced that if you earned less than R500 000 in the past tax year you won’t have to file a tax return for this year. This is up from the R350 000 limit which we have been accustomed to during the past few years. Bear in mind that this new limit has nothing to do with the tax threshold. The tax threshold (ie the annual earnings amount below which you do not pay any tax) is still at R 79 000 p/a for those that are below the age of 65 for the 2020 tax year.

There are however a few basics that you need to be aware of: 

  • You must have only worked for one employer for the full tax year and therefore have received only one IRP5. So, if you changed jobs during the tax year then your employers for those employment periods would have independently sent your respective IRP5s to SARS, and hence a return will therefore need to be submitted. This is because each IRP5 would contain the tax as calculated and deducted for those specific earnings over those periods, but when the earnings on these IRP5’s are consolidated you could be pushed into a higher tax bracket and thus a higher rate of tax could be applicable, resulting in you needing to pay in the shortfall.
  • You have no additional allowances / deductions to claim – eg medical expenses and / or Medical Tax Credits that you did not receive during the tax year, retirement contributions you made for which you did not get the tax benefit, or certain donations that you may have made during that tax year.
  • You don’t have a travel allowance and you don’t make use of a company car.
  • You earned no other income during that year – eg interest income, rental income, income from another job, etc.
  • You did not sell anything during the year which resulted in a capital gain of more than R 40 000.

But even if you met all the above criteria it’s still good practice to file a tax return. One of the main reasons being is that you could unknowingly be due a refund, as your employer may have got your tax calculation slightly off during the year, resulting in you paying in a little too much tax each month, which you are fully entitled to get back.

Other reasons for filing a return:

  • It’s always a good idea to stay compliant with SARS, so if you have been submitting a return each year then continue doing so. You don’t want to give SARS a reason to audit you as this can often be an unpleasant and unnerving experience.
  • You may at some stage need a Tax Clearance Certificate, for example if you are needing to purchase a home (for which you need a long term loan !) or you are wanting to participate in an offshore investment (eg a foreign currency savings account). You can ordinarily only get a Tax Clearance Certificate if your returns are up to date.

Just a reminder

 Tax Season starts on August 1 for all taxpayers. Taxpayers who are registered for eFiling or make use of the new SARS MobiApp can file their income tax returns from July

The closing dates for the Tax Season are October 31 for branch filing, December 4 for non-provisional taxpayers who use efiling and the MobiApp, and January 31, 2020 for provisional taxpayers who use eFiling

SARS have also mentioned that the eFiling platform has been improved to make it easier to file a return, submit supporting documents and to make payments. 

Like and Follow Our Social Media Pages

Please follow and like us:
error

Enjoy this blog? Please spread the word :)