Efiling
Now you are ready to do your bit for your country!! Remember, you need to be declaring everything relevant in the period 1 March 2021 to 28 February 2022.
Log-into efiling with your username and password. The first thing that will come up is the so called Wizard (this is not a reference to the Game of Thrones or Harry Potter). It is a pre-screening questionnaire about your personal tax affairs. By properly completing these questions, the subsequent screens will be customised to suit your personal tax situation.
You will be asked if you were unemployed for any period in the year. A “Yes” response will trigger a request for the periods of unemployment
Did you earn any income that is on an IRP 5 or IT 3a? If so, you will be asked how many of these you received from your employer(s). This should already be on the efiling system, so check that what you have conforms with what is on the system – make sure it covers the correct period i.e. 2022 tax year
Travel allowance and logbook
If you received a travel allowance which is reflected on your IRP 5 (code 3701), you will be asked to submit a logbook. As stated before, you will have already been taxed on most of this allowance, so you are most likely due a refund, but there is no chance of receiving it without a logbook. The logbook must specify the make of the car, the year of registration, the registration number, the cost, the dates of travel with opening and closing mileage, where travelled and why travelled.
Medical expenses
Did you incur any medical expenses including medical aid contributions? If so, you should have received a medical aid certificate from the medical aid. This should already be on the efiling system, so check what you have on the physical medical aid certificate with what is on the system. Make sure it is the 2022 certificate. There is also a space on the return to capture medical expenses not covered by medical aid. For this you will need to have copies of the invoices and proof of payment of these expenses. If you cannot provide this your claim will be disallowed.
Retirement annuity
Did you make any contributions to a retirement annuity? If so, you should have received an IT3f (or more than one) from the relevant institution(s). This should already be on the efiling system, so check what you have on the IT3f with what is on the system. Make sure the IT3f certificates are for the correct tax year
Investment income
Did you earn any investment income (interest, dividends etc)? If so, you should have received an IT3b (or more than one) from the banks, unit trusts, asset managers etc. Make sure the IT3b certificates are for the correct tax year. There are various codes on these forms, so ensure you capture the correct figures against the correct codes e.g. code 4201 is local interest; code 4238 is income from REITs; code 4118 is foreign interest; code 4116 is foreign dividends etc.
There is a separate place to fill in your dividend income – the Wizard has a question in this regard, and you will find this information on your IT3b.
Public Benefits Organisation
Did you make any donations to a Public Benefits Organisation (PBO)? You can claim such deductions but only if you have a S18A certificate from the organisation which clearly reflects their PBO number. Without this document you cannot claim the donation. The tax form requires you to enter the donee’s PBO number
Capital Gains
Did you make any capital gains in the year? If so, you should have received an IT3c from the bank, unit trust, asset manager etc. Make sure the IT3c certificates are for the correct tax year. You may also have made capital gains which is not reflected on an IT 3c, for example, the sale of your house or a second property. You will need to record the sale value and the original cost of these assets. The cost can include any subsequent costs you may have incurred in improving the asset.
Running a business?
Did you earn any income from running a business? If so, you need a summary of all the invoices issued and a list of all costs incurred in the production of this income. Remember, if you are vat registered, both the income and the claimable costs must exclude vat. If you are not vat registered you can claim the full cost including vat
Renting out property
Did you rent out any property for reward? This includes Air BnB or occasional renting out your home e.g. over the December holidays. Please take note that SARS has at hand this information too, but will not have prepopulated in the return!
- If so, you will need to report 100% of the rental income received and reflect any costs you wish to deduct e.g. insurance, cleaning, repairs and maintenance, bond interest, bank charges, body corporate levies, municipal charges etc.
- If the property is only partly owned by you, there is a space to indicate what percentage you own and then the system will calculate your percentage of the profit or loss from rent
Contributions
Did you make any contributions, or did you have any tax free savings accounts? If so, you should have received an IT3s from the relevant institution. Complete this section using the codes on your IT3s
Income from a trust
A select few of you may have received income from a trust. If so, it is important that you receive a statement from the trustees indicating what you received broken down into the various income items distributed by the trust (interest, rent, business profit, capital gains, dividends etc)
The home office
Don’t forget the home office claims, even if you only have a salary, and your employer requires you to work from home. Covid-19 has changed how we work in a virtual world. However, SARS is seriously scrutinising this claim. The SARS Commissioner announced recently that SARS disallowed 62% of these claims in the 2021 tax year. Sad indeed, but again it is how the taxpayer is setting out the claim and the follow up by SARS.
A few pointers here – take a 360-degree photo of your home office. Make sure it is an exclusive area and that your time spent in it is more than 50%. Also obtain a letter from your employer confirming that you are required to work from home.
Conclusion
These are the most common items on tax returns. There are other questions on the Wizard, but likely they will not apply. If you are unsure, feel free to contact a tax practitioner for advice – most of us love to take the battle on and address Ceasar and get the fair result!