Financial and Tax Wisdoms

It’s time! The 2010 tax season for individuals and trusts kicked off on 1 July 2010. Taxpayers may now start submitting their income tax returns to SARS.

Below are a few points that taxpayers should bear in mind this tax season:

1.   To avoid penalties, submit your 2010 return timeously! The deadline for submission of:
•   manual returns is 30 September 2010;
•   electronic returns for all taxpayers (other than provisional taxpayers) is 26 November 2010; and
•   electronic returns for provisional taxpayers who are in good standing with SARS (i.e. who have no returns outstanding other than the 2010 return), is 31 January 2011.

2.   Note that failure to submit your return by the due date will result in SARS imposing penalties on a monthly basis.   These penalties range from R250 to R16 000 per month, depending on the type of taxpayer and the taxable income of the taxpayer in the preceding tax year.

3.   An important change this year is that, if you are married in community of property, it will be compulsory to disclose your spouse’s details on your tax return. Remember to declare 100% of your investment income earned (even if you are married in community of property). SARS will do the necessary apportionment.

4.   A further change is that if you are a “handicapped person’ and wishes to claim a deduction for your medical expenses, you are required to re-confirm your disability status by completing a specified form (Form ITR-DD – Confirmation of Diagnosis of Disability). This form must be signed by a duly, registered medical practitioner and must be submitted to SARS.

5.   Once again this year, if you earned remuneration of less than R120 000 for the full tax year, you may elect not to submit a tax return provided:
•   the remuneration was earned from a single employer;
•   you did not receive a car allowance;
•   you did not receive any other income during the tax year; and
•   you do not wish to claim any tax deductions.

6.   Complete all mandatory fields – Your return will be rejected by SARS if these fields are not completed which means that you may be liable for penalties for late submission of the return.

7.   You returns will be pre-populated with any information that SARS obtained from third parties (for example, from your IRP5 certificates). It is your responsibility to verify this pre-populated information –If it is not correct, you may change it and SARS may require you to submit supporting documentation to explain any changes. Do not submit supporting documentation with your tax return.

8.   Retain your records for a period of at least five years from the date of submission of your return.

9.   Ensure that your return is correctly completed and all the income earned by you during the tax year is disclosed. Note even if a tax consultant completes your return, SARS will hold you responsible for omissions or incorrect information.

10.   Use the on-line tax calculator to calculate the outstanding tax due by, or refundable to you.

Anthea Scholtz, Tax Director, Deloitte  www.deloite.co.za