> Six steps to debt freedom

> Brighten their future

> Gold fever: here to stay?

> Nedbank goes green

> Evaluating performance

> Gold hits 18-month high

> Pay less estate duty

> Why lending will resume

> Positive platinum demand

> Breaking the habit

Today, 22 November 2009

› SACP attacks Malema

› Meteor 'flash' in Gauteng

› Malema attack 'racist'

› Govt settles with Pikoli

› Will cops play brokers?

Yesterday, 21 November 2009

› SACP attacks Malema

› Match-fixing stuns Europe

› JZ hails Miss World effect

› Henry offers replay

› No armchair ride for Boks

It's that time of year again when the taxman wants to know how much you've earned and how much tax you owe him. Don't forget that your individual tax return has to be returned to the South African Revenue Service (Sars) by July 14 this year, unless you've applied for and received an extension.

To start the ball rolling you'll need to get all the correct paperwork together. According to Sars you need:

• IT12 personal income tax form
• IRP5 certificate from employer outlining the tax you've paid
• Statement of your Medical Aid contributions
• Retirement Annuity contribution certificate
• IT3(b) from financial institution of interest earned
• All supporting documentation to substantiate claims

Many people haphazardly fill out their returns which causes unnecessary delays — an attitude that can hurt your wallet. The first step you need to take is to avoid the most basic mistakes that cause both you and the Receiver headaches.

• Forgetting to check the arithmetic on your return. People often transpose numbers or simply leave off zeros. Remember that even if the receiver owes you a refund it could be delayed if the form isn't filled in properly.
• Messy or illegible handwriting. If you don’t write clearly your assessment may be placed at the bottom of the pile. Make sure your handwriting is legible and that you clearly indicate your ID number on the form.
• If you regularly get large refunds you're having too much tax deducted and are, in effect, giving an interest-free loan to the South african Revenue Service (Sars). Changing the number of allowances you claim on a form will increase your take-home pay.
• Not keeping copies. Use certified mail or hand-deliver important correspondence. Don't forget to keep your records in good shape so that you can find answers to any questions about your return.

Many of these headaches can be avoided if you use a good tax consultant to complete your return, and self-employed people should definitely consider using a professional.

Remember that the receiver makes mistakes too and a consultant will often spot errors that you might not pick up. Another benefit of using a consultant is that it may be possible to structure your salary in such a way that it reduces your tax bill. You will however, need co-operation from your employer.

How to pay less tax
We all want to pay less tax, but instead of looking for loopholes and gray areas, rather focus on managing your tax affairs as efficiently as possible.

Justin Liebenberg, senior tax manager at Grant Thornton, suggests the following tips to make the current tax year a little easier on your pocket when it comes to next year's return:

• If you have a travel allowance, keep a logbook
  If you travel a great deal for business purposes, talk to your tax consultant about keeping a logbook of kilometres travelled, rather than using the deemed kilometre formula in calculating your travel allowance deduction. Sars no longer allows deductions for travel allowances where the odometer readings are not completed.

  A common problem is that the taxpayer completes the travel allowance computation, but the deduction is never carried forward to the main section of the income tax return, which means that Sars might not reduce your taxable income accordingly.

• Keep records of medical expenses
  Keep the invoices of medical expenses, which are not covered by your medical aid, in order to get a deduction for those expenses on assessment.

• Watch that entertainment allowance
  Since March 1, 2002, no deductions can be claimed against entertainment allowances. Make sure your employer is aware of this and that the allowances are taxed in full, otherwise you might end up with a tax liability on assessment. These expenses may however still be claimed by commission earners.

• Be aware of deadlines
  In order to avoid penalties, tax returns must be submitted before the due date given by Sars. Make an extra copy of the first page of your return and ask someone at the Sars office to date stamp it as proof of submitting the return on time.

  If your previous years’ tax affairs are up-to-date an extension for submission of the return can be requested. However, extensions are granted less frequently, depending on your particular circumstances.

  For example, if you are on a straight salary with no fringe benefits or allowances your application for an extension may not be successful. If you are a beneficiary of a trust and receive income from this, then your motivation for an extension will be considered. In other words, the more complex your tax affairs are the more flexible SARS will be when granting extensions.