During my 15 years as a headhunter, career strategist, and recruiter, I have personally reviewed the financial information of many thousands of professionals. And there is a constant trend in all of these people’s financial information: those who properly manage their tax affairs and submit their tax returns on time are often the same type of individuals who plan strategically with regard to their careers. To view the experience of logging onto SARS eFiling not as a chore but as an opportunity to evaluate your personal financial standing and to make sure you are paying no more than what is required to be paid, based upon your tax obligations, is a vital part of managing your financial well-being.
So let’s consider the experience of preparing for and submitting your tax return through SARS eFiling not as something you are forced to do, but as a way to examine and manage your own personal financial picture.
Part 1: Preparing to File—Preparation is Mandatory
When you go online, you should know what you are doing and have an understanding of the environment you are operating in.
Who Must File? – Identifying Your Obligation
Many people believe that once you earn above R165 000 annually, you must file a tax return. However, the correct way to think of this is to identify that there are specific categories that trigger the need to file a tax return. For example, if you have multiple income sources, such as side hustles, you must file a tax return. As most people’s careers today are nonlinear, and SARS is becoming much more sophisticated in identifying various types of income from differing sources, it would be wise to file a tax return to avoid potential penalties.
Additionally, if you have any deductions to claim for medical/health expenses, contributions to a Retirement Annuity (RA), or charitable donations, then filing a tax return is the only way to recover these losses. Therefore, not filing a tax return would essentially mean losing out on these potential savings.
Document Collection: Building Your Evidence File
Do not think of document collection as simply collecting pieces of paper; think of it as building your case file. In a professional audit or review, the party that is prepared is the party that wins.
Core Documents Required (Non-negotiables):
- Your identification.
- The IRP5/IT3(a) form from your employer, which is the official record of how much you earned and how much was deducted from your pay.
- The Medical Aid Tax Certificate, which is supplied by your medical aid, is necessary to claim medical credits.
- Certificates for your RA, if you made contributions to a registered RA, as contributions to a registered RA are tax-deductible and thus reduce your taxable income.
Logbook for travel allowance: If you received a travel allowance, then you need to maintain a logbook to prove your travel claims.
Additional Documentation (Value Adds):
Home Office Expenses: With the increasing popularity of remote working, home office expenses have become a significant item. To claim home office expenses, you will need to collect and maintain documentation of the expenses you incurred (such as electricity, internet, and stationery). In addition, you must also comply with the SARS requirements for establishing a dedicated workspace.
Certificates for Donations under Section 18A: If you donated to organizations recognized under Section 18A, then you may be able to claim these donations against your taxable income. Certificates for your donations are your proof.
Rental Income/Expense Statements: If you rent a property, then maintaining rental income/expense statements is a business necessity, and you must declare this income.
Pro-Tip: Create a designated digital folder for storing tax documents. Collect documents throughout the year as you receive them. This saves tons of time and effort yearly and creates a solid evidence trail for you.
Part 2: Completing Your Return—How to Successfully Submit Your Return
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Registering on eFiling—Creating Your Digital Profile
The eFiling system is your point of contact with SARS. When you register successfully on the eFiling platform, it is the first step towards a smooth tax filing journey.
The Steps:
Go to www.sarsefiling.co.za and select “Register.” You will require your ID and mobile phone for verification purposes.
Strategic Point: Your tax reference number is different from your ID number. If you do not have a tax reference number, you will need to contact SARS via telephone (0800 00 7277), visit a SARS branch, or download and utilize the SARS MobiApp. This is a one-off registration process.
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Navigating your Dashboard: The Control Panel
The eFiling user interface is not the prettiest thing in the world; however, focus on the sections that matter:
- “Returns” Tab: This is where you start and complete your income tax return, also known as the ITR12.
- “Documents” Section: This is where you will see documents uploaded by third parties (i.e., your employer will upload your IRP5). Ensure that the data populated automatically is accurate. Do not rely on others to perform tasks on your behalf, and do not expect errors not to occur.
- “Statement of Account”: This shows your total account balance with SARS, whether you owe taxes or are owed a refund.
Pro-Tip: Set up SMS notifications in your profile settings. This will keep you updated on the status of your return and any correspondence from SARS, so you can proactively manage the submission of your return.
Advanced Strategies—Timing Tactics: Maximizing Productivity
Timing is a strategic tool in business. The same principle applies to tax filing.
File as Early as Possible: The official tax filing season runs from 01 July to 31 October. If you file your tax return early in the season (i.e., in July), it is likely that your tax return will be processed and refunded quickly, as you will be ahead of the peak usage of the system experienced towards the end of the season.
Submit During Off-Peak Hours: Submit your return at off-peak hours (i.e., Tuesday or Wednesday mornings) to avoid the slower performance of the system.
Hiring a Tax Practitioner: Knowing When to Delegate Tasks
One of the skills of being a strategic thinker is recognizing when your time would be better utilized elsewhere and/or when you need to delegate a task to someone else with greater expertise.
Consider hiring a tax practitioner to assist with your tax return if your situation is complex:
- You have various income sources, for example, rental properties or freelance work.
- You have traded in cryptocurrency or other complex investments.
- You have had multiple job changes in a single year.
- You have income earned abroad or assets located abroad.
Finding a Practitioner:
Verify that they are a registered tax practitioner with SARS.
Ask for a flat rate fee upfront. Fees based on a percentage of the tax liability create a conflict of interest between you and the practitioner.
Even though you have hired a professional to assist with your tax return, you still need to organize the documentation and understand the return before signing. The ultimate responsibility for your tax return remains with you, the taxpayer.
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