How tax returns will be easier this year, and should you file if you earn under R500,000?
The dreaded Tax Season is once more upon us, and you’ve probably picked up news of the increased R500,000 personal income tax threshold to replace the previous one of R350,000. What does that mean for you in practice and what are the limitations and provisos applicable? Be careful here – even if you qualify for exemption from having to file a tax return, it might pay you to lodge one anyway.
Read on for thoughts on that, plus some useful details on how SARS has (as it puts it) “improved online filing and filing at a SARS branch with several exciting innovations for Tax Season 2019 to make it simpler and more convenient for taxpayers to file an income tax return.”
We end off with a helpful “Tax Season 2019 Deadlines” table.
“Death and taxes may be inevitable but they shouldn’t be related”
(J.C. Watts Jr)”
Tax season 2019 begins on 1 August (1 July for taxpayers who are registered for eFiling or have access to the MobiApp) and SARS has taken further steps to reduce the burden on both taxpayers and SARS’ administrative systems.
This year there are three initiatives:
- Increase the threshold of submitting tax returns from R350,000 to R500,000
- Enhancements to the MobiApp and improvements to EasyFiling
- Moving out the dates for submission of returns.
Threshold increased to R500,000
Taxpayers with employment-only income now only have to file a tax return if their annual employment income exceeds R500,000 (previously R350,000). The provisos to this are taxpayers must have:
- Only one employer during the tax year
- No other income such as rentals received or car allowance etc
- No other additional deductions to claim e.g. medical costs or retirement funding
- Not made a capital gain of R40,000 or more.
A problem SARS has had with this is that many of these taxpayers still submit returns – up to 25% of tax returns received do not need to be filed. In a further effort to prevent taxpayers submitting unnecessary returns, SARS will send each of these taxpayers a simulated outcome as if they had filed a return which will show no tax is due.
Should you file a return even if you don’t have to?
If you may be in line for a tax refund, then it pays to do a tax return. In addition, if you think you may need a Tax Clearance Certificate it is probably prudent to complete a tax return. This will save any potential delays as SARS may query why you did not file your income tax form.
Ask your accountant for advice specific to your situation.
Enhancements you need to know about
SARS has been making efforts to upgrade their IT systems to reduce the number of people who use SARS branches to complete tax returns. Thus far this has had limited success, so SARS is increasing its efforts this year.
- The MobiApp*
This enables taxpayers to submit their returns using their smartphones. Security has been enhanced by:
- A biometric authentication facility
- A one time pin has been added
- The use of security questions
- You can easily reset your password and username.
One really good feauture is the scanning and uploading of documents.
* the MobiApp cannot be used for provisional payments.
The system is now more user friendly for making payments, submitting your return and uploading documentation. In addition, Notices issued by SARS will be more specific, e.g. the Notice will specify what documentation SARS require in the event of verification and audit.
Taxpayers may use the MobiApp or EFiling from 1 July but may only use branches for submitting their returns from 1 August.
Your Tax Season 2019 Deadlines
(Adapted from a SARS table)
What is of interest in the table above is that the deadline dates have been moved out for manual submissions (it was 21 September last year) and for non-provisional taxpayers (31 October in 2018) whilst there is no change for provisional taxpayers.