Take the fear out of completing your individual tax return!

Completing your individual tax return can be cumbersome and overwhelming, especially if you are uninformed about the basics. The important part of completing a tax return is to know exactly what you are allowed to claim as a deduction and then to understand how you should claim that deduction.

Navigate the scary world of tax like a pro!

The filing season began on 1 July 2013. The deadline for:

  • Manual submissions is 27 September 2013,
  • Electronic submissions is 22 November 2013, and
  • Provisional taxpayers submitting electronically is on/before 31 January 2014.

Here are the answers to some tax-related frequently asked questions:

Which period is this tax return for? Income earned between 1 March 2012 and 28 February 2013
Who must submit a tax return?

You do not need to submit a tax if you only earned remuneration from one employer and it did not exceed R250 000.

However, if you earned any other form of income or you need to claim deductions – such as travel expenses – you need to complete a return.

Hint: Complete the questionnaire on the SARS website at www.sars.gov.za. This will help you to determine if you need to submit a return.

Where do I start?

With eFiling, you can easily complete your tax return yourself. Guides are available on the SARS website to assist you with the process.

Alternatively, you can contact a registered tax consultant.

Submit your return on time

To avoid any penalties or imprisonment, submit your return on time. Do not wait until the last submission day.

You will be charged penalties if you do not submit on time. These amounts are calculated on a sliding scale, depending on your taxable income. The penalties can range between R250 and R16 000.

What is an income replacement policy?

An income replacement policy is a policy that covers you against loss of income as a result of:

  • Illness,
  • Injury, 
  • Disability, or
  • Unemployment.

If you have an income replacement policy, you need to claim your contributions as a deduction on your ITR12 return.

More about the process
  • On your IRP5, there will be an amount next to the code 4018 – Premiums for Loss of Income.
  • Enter this amount on your return, under the deduction section. Even though this amount is reflected on your IRP5, it will not automatically be reflected on your ITR12. If you do not manually enter it, you will not receive the tax benefit and it might seem as if you owe SARS money if you have received the benefit on the payroll during the year.
  • If the contribution amount is not reflected on your IRP5 and you contributed towards an income replacement policy in your private capacity, follow the same procedure.

Step 1: Make sure to tick the field next to: ‘Did you make any retirement annuity fund contributions?’

Step 2: Enter the contribution amount next to code 4018 under the Retirement and Income Protection section.

Business travel expenses and your travel allowance

If you received a travel allowance from your employer, you have to have a logbook to be able to claim any travel expenses you incurred for business purposes. If you did not keep a logbook of the kilometres you travelled, your travel allowance will be fully taxed:

  • The portion of the allowance which you used for private purposes will be taxed, and
  • The portion you used for business purposes will be exempt from tax.

Initially, the full amount will be taxed, but once you claim the business expenditure as a deduction, it will reduce your taxable income.

2 Ways you can claim business expenditure

1.    If you kept records of all your actual expenses – such as maintenance, licence and fuel – then you can claim the actual expenditure. 

2.    You can claim the deemed rate per kilometre for each business kilometre travelled. You can determine the deemed rate by using the table provided by SARS. This table contains rates according to the value of your vehicle. This calculation will be done automatically on eFiling.

Keep in mind that your claim will always be limited to the actual allowance you are paid:

  • For example, if you received a travel allowance of R50 000 but your business expenditure was R70 000, then you can only claim R50 000 as a deduction.

Important technical detail: Make sure to tick the box next to the question: ‘Do you want to claim the expenditure against a travel allowance?’ and then you need to enter the details under the relevant section. If you received the allowance from your employer, the travel allowance will be reflected on code 3701 and 3702 on your IRP5.

What to do if you have a company car

If you were using a company car, your employer would have taxed you on the fringe benefit value, which is calculated according to the value of the car.

You must keep a logbook of business kilometres to claim a reduction in the fringe benefit value on your individual assessment. Claims for maintenance, insurance, licence and fuel will also only be allowed if you kept accurate records.


If the fringe benefit value was R160 000 and you travelled 12 000 km, of which 10 000 was for business purposes:

R160 000 x 10 000/12 000 = R133 333

A deduction of R133 333 will be allowed. This calculation will be done automatically on eFiling, once you have completed the relevant information.

And medical expenses?

  • If you are younger than 65:

Your actual medical expenses (out-of-pocket expenses) will be added to your deemed expenses to be able to calculate your total medical expenses. (Deemed expenses are the contributions towards your medical aid in excess of four times the medical tax credit entitlement for the year.)

If your total medical expenses exceed 7.5% of your taxable income, the value of this will be the allowable deduction:

For example, if your taxable income was R100 000 and 7.5% thereof is R7 500, then only the total medical expenses which exceed R7 500 will be allowed as a deduction.

  • If you are 65 or older: You will be allowed to deduct all your medical expenses.
  • If you, your spouse or your child is a person with a disability, please refer to the detailed list on the SARS website which details what you are specifically allowed to deduct.

by Yolandi Esterhuizen

This article first appeared on HR Pulse.

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