For the average salary earner in South Africa, there isn’t much left to deduct on your return. Car allowance and retirement annuities are just about all that is left to consider.
The car allowance will only be considered if you have a kept a log book detailing your business and private milage for the year. Remember that travel from your home to your place of work does not qualify for business travel. It is deemed to be private travel by SARS. Only travel from your place of work to clients counts as a deduction. Most tracking units fitted for insurance purposes have a log book device which details your travel every time you start and stop on your travels. This is well worth the cost taking the schlep out of the keeping records during the year.
Retirement annuities are still deductible from your taxable income and should be maxed out every year as it is one of the best investments you can make towards your retirement. The deduction you get is the same rate as your marginal rate of tax. If you pay 30% tax then your dedication is 30%. So for every rand you save towards a retirement annuity you effectively only pay 70 cents. A 30% return before you start investing. The deduction comes with limits. If you are on a pension fund then you are limited to R1 750 and a provident fund limits you to R3 500 per annum. If you don’t contribute to a retirement fund with your company then you can deduct up to 15% of your taxable income. The deadlines for submission is 27th November 2015 and 29th January 2016 if you are a Financial Planning Helping you to understand things a bit better provisional tax payer. July has been declared as National Savings Month. A hard theme to follow in a time of deep global recession and rising costs in our local economy. In spite of these hard times we still need to tackle savings as a “must”.
Saving is an attitude
You decide to save an amount and then commit to it. Save at the beginning of the month and then live on the rest of your income. Your true standard of living should be based on the amount you bring into the household after savings. This ensures that you are providing for your financial freedom into the future. If you are not saving you will never break free from living hand to mouth.
Read more from Paul Roelofse at www.investforlife.co.za
This article first appeared on 702 : It’s tax time again...