ALL YOU NEED TO KNOW FOR TAX SEASON 2024

As the new tax season begins on the July 15, 2024, South African taxpayers are planning for another round of tax submissions with the South African Revenue Service (SARS).  It is crucial to ensure that you remain compliant and adhere to the due dates to ensure a smooth and hassle-free tax season.

Here are some key points to know about tax season 2024:

1. Important dates:

The dates for the 2024 filing season are:

• Individual taxpayers (non-provisional): July 15, 2024, to October 21, 2024
• Auto-assessment notices: July 1 – 14, 2024
• Individual taxpayers (provisional): July 15, 2024, to January 20, 2025
• Trusts: September 16, 2024, to January 20, 2025
• Companies: within 1 year from the end of the company’s tax year (ie. If the companies tax year ends on February 29, 2024 the tax return is due by  February 28, 2025; companies with tax year ends on March 31, 2024 need to submit by March 31, 2025, and so on)

2. Filing deadlines:

It is imperative for individuals and businesses to file their tax returns by the specified deadline to avoid penalties and interest charges, as SARS strictly enforces these deadlines.

3. Ensure your details are up to date with SARS:

It is important that SARS has all your latest information to ensure a hassle-free filing experience and if any of the following has recently changed SARS should be notified thereof:

• All telephone numbers
• All addresses
• Bank details
• Marital status

4. Who needs to submit tax returns?

Submissions of tax returns are mandatory for certain individuals based on their income sources and financial activities. Generally, the following groups must file tax returns:

• Employees: Individuals earning above the annual income threshold for tax submission, which is currently set at R500,000.
• Self-employed individuals: Freelancers, entrepreneurs, and sole proprietors must report their business income and expenses.
• Commission earners: Those earning commission income, such as sales representatives, need to file tax returns.
• Additional income: Individuals with additional income sources, such as rental properties or investments, also need to submit tax returns.
• Trusts and estates: Trustees and executors are responsible for filing tax returns on behalf of trusts and estates.

5. Auto-assessments:

SARS will again issue auto-assessments to taxpayers whose tax affairs are less complicated, using data that they have received from third-party sources,, such as employers, financial institutions and medical schemes.  If you agree with your auto-assessment, no action is required other than to make payment to SARS if payment is due.  If a refund is due to you, it will automatically be paid into your account.  It is important to note that accepting an auto-assessment, if incorrect, may result in underreporting of income and potential penalties.  Discrepancies can be rectified via eFiling.

6. Changes to note for the 2024 year:

The updates for this coming Filing season are:

• Pro rata deduction in respect of contributions to Retirement Funds – where any person’s year of assessment is less than 12 months, the amount stipulated in the Act used to calculate the allowable retirement contributions deduction (currently R350 000) shall be adjusted and applied pro-rata based on the number of days in that person’s year of assessment.
• Exemption of amounts received or accrued in respect of tax-free investments – where any person’s year of assessment is less than 12 months, the contribution limitation stipulated in the Act (currently R36 000), shall be adjusted and applied pro-rata.
• Individual solar energy tax credit – this credit is available to individuals for one year and applies to new and unused solar PV panels acquired by the individual and brought into use for the first time from March 1, 2023 to February 29, 2024. The amount of the credit allowed as a deduction is 25% of the cost up to a maximum of R15 000.  It should be noted that a deceased estate does not qualify for this credit.
• Business redesigned renewable energy tax incentive – businesses can deduct 125% of the cost incurred with reference to eligible assets upfront. Where a taxpayer disposes of an asset on or before March 1, 2026, for which this tax incentive was granted, the amounts deducted will be recouped.

7. Individual tax deductions and credits:

Tax season is an opportunity to claim deductions and credits that can help reduce your overall tax liability or result in a refund. It is crucial to review available deductions and credits to optimize your tax return. Common deductible  items include medical aid contributions, medical expenses, contributions to a pension fund and/or retirement annuity, donations to approved charitable institutions, and interest rebates.  Where allowances are included in a salary package the relevant expenses attributable to that allowance can be claimed.  If rental income is earned, all costs relating to the property can be deducted, including bond interest, insurance, rates, maintenance, etc.

8. Importance of proper record-keeping:

Keeping accurate and organized records of your income, expenses, and deductions is crucial for smooth tax preparation. Gathering and organising the necessary documentation, receipts, and statements, can help simplify the tax filing process.  Essential documents include:

• IRP5/IT3(a) Certificates: Detailing earnings, tax deductions, and retirement fund contributions.
• Income statements: Documenting additional income sources like rental income or freelance earnings.
• Bank statements: Reflecting interest earned, dividends, and financial transactions.
• Medical aid certificates: Confirming contributions and medical expenses.
• Medical expenses: invoices and proof of payment for out-of-pocket medical expenses paid.
• Retirement annuity fund certificates: Validating contributions to retirement funds.
• Travel logbooks: If claiming travel expenses, maintaining a logbook is essential.
• Receipts and invoices: Supporting deductible expenses like work-related costs or donations.

9. Consider seeking professional help:

Although many individuals choose to prepare their own tax returns, the complexity of the tax requirements can be overwhelming. It may be beneficial to seek assistance from tax professionals or use tax software to ensure accuracy and maximize potential deductions and credits.

10. Scams and Phishing awareness:

Stay vigilant against email and SMS scams attempting to impersonate SARS. Verify any suspicious communications by contacting your tax professional or directly emailing phishing@sars.gov.za.

Paying tax is vital for the functioning of our country’s government and economy. Taxpayers are advised to consult with tax professionals and use online tools provided by SARS to keep abreast of updates and changes in tax regulations.  Compliance with these key dates and requirements ensures a smooth and efficient tax-filing process which contributes to the overall financial health of South Africa.

Written by Mandy Roesstorff, Professional Accountant (SA) – BVSA Director (Port Alfred)