Stalling to file your tax return? Here’s how to overcome your fears
There is help if making a mistake when filling in the return scares you
Most taxpayers fall into one of two groups – those who fill in their returns quickly to get a refund and those who wait until the last minute.
If you are one of the last-minute filers, you may be wondering why you wait until the deadline – now less than a month away on December 4 for most taxpayers.
If any of these reasons for procrastinating resonate with you, consider the advice that follows:
- You are scared of filling in your tax return
Many people fear the South African Revenue Service and think they may do something wrong on their return, but they are reluctant to spend money on a tax practitioner, Craig Hirst, chairman at The Tax Faculty and CEO of Trident Tax and Accounting Solutions, says.
If making a mistake when filling in the return scares you, you can get help from officials at a SARS branch or you can use SARS’s eFiling and its Help-You-eFile service. On the eFiling page look for the link once you’re in eFiling and ask for a SARS agent to call you. The SARS consultant will shadow and guide you on what to do without seeing sensitive information like your bank details.
Hirst says help filling in the return isn’t always enough, as you may need help checking that your assessment is correct or objecting to an assessment when for example you don’t agree with a deduction that is disallowed.
If you don’t know the law or the processes to follow, help from a tax practitioner may be invaluable and the cost may be offset by tax-savings or tax-saving planning your practitioner helps you achieve, he says.
Nyasha Musviba, a tax consultant at the South African Tax Guide, says engaging a tax practitioner to help you with your return as an employee will probably cost around R500 to R600. A director with more complex affairs would probably pay more.
Both Hirst and Musviba say meetings can mostly be avoided as documents can be emailed.
- You hate the admin
If you hate the job of gathering all the documents and information you need, make this the last year you face this task.
Set up tax files, either paper ones or ones on your computer or in the cloud for electronic documents and make sure that as you get them you file the documents such as your IRP5 from your employer or employers, your medical scheme certificate, certificates from any investment houses or banks where you have investments or retirement annuities.
When filing time comes or you hand the task to a tax practitioner, you won’t have to waste time hunting for documents.
Musviba says if you claim for medical expenses you did not submit to your medical scheme, you will need proof of payment. Submitting claims to your scheme that you know it will not cover may be worthwhile as you don’t need to prove you paid expenses your scheme records on your medical scheme tax certificate.
If you receive a travel allowance and need to claim for mileage, use one of the apps for recording your mileage – online tax practitioner TaxTim (taxtim.co.za) offers one.
If you need to claim home office expenses, use an app like 22Seven or your banks’ app to identify your expenses for the year, e.g. what you paid for data or phone calls.
- You expect to pay in
Early filers typically expect a refund, but late filers are often taxpayers who expect to pay in. If you expect you won’t be able to pay the bill in full, you can negotiate with SARS to pay it off.
Hirst says you typically get between four and six months to pay the amount off and the interest rate is 10.25%.
He says he has seen SARS hold off on taking action against taxpayers who stick to paying as much as they can even if it takes longer to repay the debt.
- You have more than one tax return outstanding
If you have returns outstanding SARS is likely to be hounding you to submit and it may even threaten legal action.
Hirst says if you are in this situation you probably don’t know how much you owe for the years you have not filed.
Musviba says if you have not filed but your employer has, it is much easier because your IRP5 details will be recorded on your tax return.
If your employer has not filed this information, you will probably need a tax practitioner’s help, he says. SARS screens and turns away taxpayers who do not have their IRP5s, he says.
If your employer has failed to submit, you can submit a return using information from your payslips – but SARS will audit you and a tax practitioner can help you through the audit, he says.
Musviba warns taxpayers who earn below R500,000 to be careful about not filing a return because SARS could later say you have failed to submit a return and you could struggle to get tax clearance for a retirement fund benefit.