Navigating tax season can be challenging, but being aware of common pitfalls and knowing how to avoid them can help you manage the process smoothly. Here are some common mistakes and tips to avoid them:
1. Missing Important Deadlines
- Pitfall: Missing tax deadlines can result in penalties and interest charges.
- Solution: Mark important dates on your calendar, set reminders, and consider filing early. The deadlines are as follows:
- Auto-assessment notices: 1 – 14 July 2024. If you are being auto-assessed, please note the onus is on you to ensure the assessed return is correct.
- Individual taxpayers (non-provisional): 15 July 2024 – 21 October 2024
- Provisional taxpayers: 15 July 2024 – 20 January 2025
2. Inaccurate information
- Pitfall: Errors in personal information, such as contact numbers and email addresses can lead to processing delays.
- Solution: Prior to filing season, log in to Efiling and check whether your personal details are correct.
3. Failing to Report All Income
- Pitfall: Not reporting all income, including side jobs or investment income, can result in penalties.
- Solution: Keep thorough records of all income sources and ensure they are all reported.
4. Overlooking Deductions and Credits
- Pitfall: Missing out on deductions and credits can result in paying more taxes than necessary.
- Solution: Research and take advantage of all eligible deductions and credits. Common ones include medical tax credits and pension, provident and retirment annuity deductions. SARS has introduced a new rebate for solar energy. This incentive is available for one year between 1 March 2023 and 29 February 2024. Individuals who install rooftop solar panel(s) can claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000 per taxpayer. Read more about this incentive on the National Treasury’s website.
5. Not Keeping Proper Records
- Pitfall: Lack of documentation can make it difficult to substantiate deductions or income in case of a verification or an audit.
- Solution: Maintain organized records of all receipts, statements, and relevant documents for at least five years.
6. Ignoring Provisional Tax Payments
- Pitfall: Self-employed individuals or those with significant non-salaried income may face penalties for not making estimated provisional tax payments.
- Solution: Calculate and pay estimated provisional taxes. These payments must be made before 31 August and 28 February each year, if necessary.
7. Incorrectly Reporting Deductions
- Pitfall: Overstating or understating deductions can trigger an audit or penalties.
- Solution: Be honest and accurate in reporting deductions, and consult a tax professional if in doubt.
8. Not Seeking Professional Help When Needed
- Pitfall: Complex tax situations can lead to errors if handled alone.
- Solution: Consult a tax professional if your tax situation is complex or if you’re unsure about any aspect of your return.
By avoiding these common pitfalls, you can make tax season less stressful and more manageable. Get in touch with us today.
