Tax tips for your first-time filing
Filing your first tax return may not sound as glamourous as, say, starting a new job or finally getting your own place, but it’s a milestone as important as any other you’re likely to encounter as a young, financially independent adult.
So, while you probably haven’t spent much time dreaming about the perfect IRP5, it’s not too late to get up to speed before the big day arrives.
Here’s what you should do to prepare:
- Register as a taxpayer
Firstly, if you’re earning an income, you need to register with the South African Revenue Service (SARS), even if you think you’re not earning enough to pay tax yet. You can register online or in-person at your local SARS branch. In some cases, your employer may register on your behalf. - Know what you’re paying for
Once you’re registered, you don’t necessarily have to submit a return, depending on certain criteria. If you do have to submit a return, you will either submit an IRP5 provided by your employer or register as a provisional taxpayer if you are self-employed or a freelancer. If you register as a provisional taxpayer, you agree to pay an upfront amount of tax at the beginning of the tax year to avoid a large lump sum payment on assessment. - Get your docs in a row
Even if your IRP5 is generated by your employer, you may still need to make additional declarations for certain forms of income and expenses. Medical aid, income from savings and investments, and charitable donations will all need to be declared and, in some cases, may even make you eligible for a rebate. The exact amounts will be recorded on a tax certificate provided by the respective institutions, so make sure you have these at the ready when you start filing your return. - Don’t wait until the last minute
While it can be tempting to delay, it’s better to try to file your tax return as early in the tax season as possible. You will most likely be notified as soon as a new tax season begins, and the sooner you file your return, the better chance you have of avoiding the rush to file when the filing period closes. - Try a smart solution
The SARS eFiling portal is a good place to start when it comes to getting a general understanding of your tax return, and it’s a good option to use to file your return once you know what you’re doing. However, for step-by-step guidance when filing a return, you should consider using an online service such as TaxTim to ensure your first return is filed correctly. It is affordable and easy to use and may even end up saving you money in the long run.
Of course, paying taxes is just one aspect of financial independence. Whether you’re looking to bank, borrow, invest or insure, we’ve got the range of solutions you need to take full control of your financial world.