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Tax Guide for South African Seniors

Posted By Marilynh / June 25, 2019 / 34 Comments

The very thought of tax is taxing on the brain!  

Don’t let the e-filing Wizard (not a reference to Game of Thrones or Harry Potter!) become an insurmountable problem. 

Rather check out this A-Z of how to complete your tax return!

 

senior man tax return

 

How to complete your tax return:

The first thing to ask is whether you actually need to complete a return. SARS recently increased the threshold for the completion of tax returns to R500 000. This announcement caused (and still causes) huge confusion among the citizenry.

What this actually means is that, if you only earned salary income from only one employer in the tax year; and that income was below R500 000 then you don’t have to submit a tax return i.e. it is not obligatory. Any deviation from this and you have to submit a return. If you contributed to a medical aid or retirement annuity, you will need to submit.

If you did earn any other income e.g. interest or rental income, no matter how little, and your total income is under R500 000, then sadly you must submit a return. So the exemption only applies if you only earned salary from only one source and earned no other form of income.

There is a but, of course. Even if the threshold applies to you, you may still choose to submit a return if you think you may be due a refund. The most common instance being, if you contributed to a retirement annuity in the year, the chances are you will be due a refund. Also, if your employer was not completely accurate with the paye deductions, you may be due a refund. And finally, if you received a travel allowance, you have already been taxed on most of this, so most likely you will be due a refund.

So basically, if you’re not really sure, it’s better to submit, than not submit.

For those of you submitting a return, you will need to establish whether you already have an efiling profile – this is a user name and password for you to access your on-line tax return. If you have never done this before, you will need to register for efiling which will probably necessitate a visit to SARS. I would suggest asking a tax practitioner to assist you with this otherwise you could find that you sit at SARS all day and still fail in your crusade to register because of some missing document. A tax practitioner can save all of the hassle by ensuring all relevant documentation is present and they have confirmed appointment times, which obviates the need to wait in day-long queues.

 

tax return

 

Requirements for SARS verification

– certified copy of your ID
– Proof of address not older than one month, proof of address can be one of the following:
– signed valid lease agreement (if you use a lease agreement then you will need to provide a copy of the landlord’s ID document, rates account as well as proof of their residential address, and they will need to sign a CRA001 form.
– valid motor vehicle licence form, showing your address
– telephone or large clothing retail account, ie Edgars, etc

If your tax return was previously done by someone else, either they hold your efiling profile, or you fall into their client database which means you are one of a thousand clients on their business efiling profile. In such cases you must request the transfer of the profile to yourself.

Now you are ready to do your bit for your country!! Remember, you need to be declaring everything relevant in the period 1 March 2018 to 28 February 2019.

Log-into efiling with your user name and password

The first thing that will come up is the so called Wizard (this is not a reference to Game of Thrones or Harry Potter). It is a pre-screening questionnaire about your personal tax affairs. By properly completing these questions, the subsequent screens will be customised to suit your personal tax situation.

You will be asked if you were unemployed for any period in the year. A “Yes” response will trigger a request for the periods of unemployment

Did you earn any income that is on an IRP 5 or IT 3a?

If so, you will be asked how many of these you received from your employer(s). This should already be on the efiling system, so check what you have on the forms with what is on the system – make sure it covers the correct period i.e. 2019 tax year.

 

seniors and tax return

 

If you received a travel allowance which is reflected on your IRP 5, you will be asked to submit a logbook.

As stated before, you will have already been taxed on most of this allowance, so you are most likely due a refund, but there is no chance of receiving it without a logbook. The logbook must specify the make of the car, the year of registration, the registration number, the cost, the dates of travel with opening and closing mileage, where travelled and why travelled.

The logbook clearly needs to state your travel on a daily basis, ie km for personal travel and km for business travel. Bear in mind that travel from your home to your place of work (office) is not considered to be business travel.

Did you incur any medical expenses including medical aid contributions?

 If so, you should have received a medical aid certificate from the medical aid. This should already be on the efiling system, so check what you have on the medical aid certificate with what is on the system. Make sure it is the 2019 certificate. There is also a space on the return to capture medical expenses not covered by medical aid. For this you will need to have copies of the invoices and proof of payment of these expenses. If you cannot provide this your claim may well be disallowed.

Did you make any contributions to a retirement annuity?

If so, you should have received an IT3f (or more than one) from the relevant institution(s). This should already be on the efiling system, so check what you have on the IT3f with what is on the system. Make sure the IT3f certifcates are for the correct tax year.

Did you earn any investment income (interest, dividends etc)?

If so, you should have received an IT3b (or more than one) from the banks, unit trusts, asset managers etc. Make sure the IT3b certificates are for the correct tax year. There are various codes on these forms, so ensure you capture the correct figures against the correct codes e.g code 4201 is local interest; code 4238 is income from REITs; code 4118 is foreign interest; code 4116 is foreign dividends etc.

There is a separate place to fill in your dividend income – the Wizard has a question in this regard and you will find this information on your IT3b(s)

 

tax

 

Did you make any donations to a Public Benefits Organisation (PBO)?

You can claim such deductions but only if you have a S18A certificate from the organisation which clearly reflects their PBO number. Without this document you cannot claim the donation.

Did you make any capital gains in the year?

If so, you should have received an IT3c from the bank, unit trust, asset manager etc. Make sure the IT3c certificates are for the correct tax year. You may also have made capital gains which is not reflected on an IT 3c, for example, the sale of your house or a second property. You will need to record the sale value and the original cost of these assets. The cost can include any subsequent costs you may have incurred in improving the asset.

Did you earn any income from running a business?

If so, you need a summary of all the invoices issued and a list of all costs incurred in the production of this income. Remember, if you are vat registered, both the income and the claimable costs must exclude vat. If you are not vat registered you can claim the full cost including vat

Did you rent out any property for reward?

This includes Air BnB or occasional renting out your home e.g. over the December holidays

-If so, you will need to report 100% of the rental income received and reflect any costs you wish to deduct e.g. insurance, cleaning, repairs and maintenance, bond interest, bank charges, body corporate levies, municipal charges etc.

-If the property is only partly owned by you, there is a space to indicate what percentage you own and then the system will calculate your percentage of the profit or loss from rent

Did you make any contributions, or did you have any tax free savings accounts?

 If so, you should have received an IT3s from the relevant institution. Complete this section using the codes on your IT3s

 

These are the most common items on tax returns.

There are other questions on the Wizard, but likely they will not apply.

If you are unsure, feel free to contact a tax practitioner for advice
– most of us are semi-human!

 

 

Author:  Frank Bold
Tax Accountant, FTB Administrators
Unit G03, Millvale House, 6 Millvale Road, Milnerton 7441
Tel:  021 – 5551686
Email:  frank@ftb.co.za

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Comments

34 Comments

  • Mike Van rooyen
    June 26, 2019 at 1:46 pm

    Great help and very easy to follow , Many thanks for the time and effort,

    • Marilynh
      June 26, 2019 at 1:50 pm

      Hi Mike

      Agreed! We are quite sure that SA seniors will find this of immense help. Thanks to the FTB team for this great tax guide!

      YEI

  • Verdonck
    June 26, 2019 at 2:03 pm

    Does dividend income now have to be declared, even when 20% withholding dividend tax has already been deducted and paid ? It was not in previous year’s tax returns. Thank you for clarification.

    • Neville
      June 26, 2019 at 5:23 pm

      Not sure that this is correct as previous years nothing had to be declared – as you are already taxed?

      • Marilynh
        June 27, 2019 at 1:57 pm

        Dear Neville

        Thank you for your enquiry. This will be passed on to FTB Administrators for response.

        Kind regards
        YEI

    • Marilynh
      June 27, 2019 at 1:59 pm

      Dear Verdonck

      Thank you for your enquiry. This will be passed on to FTB Administrators for response.

      Kind regards
      YEI

    • Marilynh
      July 1, 2019 at 9:21 am

      Dear Verdonck

      FTB has responded to your query:

      Yes, Dividend income needs to be declared but no further tax is due except if it is foreign dividends.

      Regards, YEI

  • Steve
    June 26, 2019 at 2:37 pm

    Thank you. Appreciate the input.

    • Marilynh
      June 27, 2019 at 2:08 pm

      Dear Steve

      Pleasure! All thanks to the FTB team!

      Regards
      YEI

  • Michael winson
    June 26, 2019 at 3:17 pm

    What is the tax free portion of interest income, and what is the abatement for over 80?

    • Marilynh
      June 27, 2019 at 1:58 pm

      Dear Michael

      Thank you for your enquiry. This will be passed on to FTB Administrators for response.

      Kind regards
      YEI

    • Marilynh
      July 1, 2019 at 9:20 am

      Dear Michael

      The response from FTB has been received:

      The tax free portion has two compnoents to it – general exemption for persons over 65 is R34500 and you also can invest in tax free savings investments which are also exempted. The rebate for 80 years is R 14220 – primary, secondary over 65 is R7794 and R2601 for over 75 years. In total R24615.

      Kind regards, YEI

  • Neville Lichtenstein
    June 26, 2019 at 5:26 pm

    The dividends have to be shown is news to me. You do not get advices to confirm the amount that you have received!

    • Marilynh
      June 27, 2019 at 1:57 pm

      Dear Neville

      Thank you for your enquiry. This will be passed on to FTB Administrators for response.

      Kind regards
      YEI

    • Marilynh
      July 1, 2019 at 9:19 am

      Dear Neville

      The response to your two queries has been received from FTB:

      Yes, withhold taxing is deducted from source but part of compliance requires you to declare it in the tax return-see non taxable income.

      Kind regards, YEI

  • Shirley Pienaar
    June 26, 2019 at 6:09 pm

    Thank you so much for all the info which was easy to follow and helped this pensioner

    • Marilynh
      June 27, 2019 at 2:07 pm

      Dear Shirley

      Pleasure! All thanks to the FTB team!

      Regards
      YEI

  • Ann
    June 27, 2019 at 9:25 am

    Thank you.
    Can you please provide information about becoming a provisional tax payer.

    • Marilynh
      June 27, 2019 at 1:56 pm

      Dear Ann

      Thank you for your enquiry. This will be passed on to FTB Administrators for response.

      Kind regards
      YEI

    • Marilynh
      July 1, 2019 at 9:18 am

      Dear Ann

      Here is FTB’s response:

      A provisional taxpayer is when income other than remuneration or allowance is not subject to employees tax. Investment income of less than R34500 if you are over the age of 65 will be exempted. Further if other income is less than R30000 then you are not required to be a provisional taxpayer. To register as a provisional you can go via efiling process and in the menu bar is organization tax types which provisional tax type can be click on.

      Kind regards, YEI

  • Frances Roberts
    June 27, 2019 at 3:57 pm

    I would also like information about provisional tax please

    • Marilynh
      July 1, 2019 at 9:33 am

      Dear Frances

      Your query has been sent to FTB – you can also see the information provided above in response to another query on provisional tax.

      Kind regards, YEI

    • Marilynh
      July 15, 2019 at 3:46 pm

      Dear Frances

      FTB has responded to your query as follows:

      We presume you are over the age of 65 years and if your overall income in a tax year does not exceed more than R186k per annum which would include interest received and the exemption amount is R34500 for interest together with the tax threshold and a further R30k that sars allows in terms of provisional tax calculations you would not need to register for provisional tax. Please let us know more about your income and we will gladly advise further on the matter.

      Kind regards, YEI

  • claudia benade
    June 28, 2019 at 10:43 am

    Thanks for the info…but I’m so doff, I don’t know how to follow your instructions.
    I’m sure that you wont be inexpensive if I ask you to ‘do my tax’ for me….The places I get my ‘pensions’ from have emailed me documents, but I don’t have a printer so I’ve asked them to mail me originals (how long the Postal Service will take to deliver) and I’ve emailed a person at SARS to post original forms to me as well (as they did last year). I thought now that I’m retired I wouldn’t have to fill in forms any more but as I’m getting all these documents from Sanlam & Momentum & Discovery, I guess I might have to do a Tax Return this year. My monthly income was just under R5,000 but I need to add about R2,500 to that for the Medical Aid Subs my ex employer still pays. And since April this year I’m getting SASSA – how will that affect my Income Tax Return?

    Thanks for letting me put this all out there. I’ve tried e-filing, but the ‘site’ keeps chucking me out, apparently its because a few years ago I had company auditors submitting e-filing on my behalf.

    Kind regards,
    Claudia Benade

    • Marilynh
      July 1, 2019 at 9:29 am

      Dear Claudia

      Your query will be sent to FTB, for their response.

      YEI

    • Marilynh
      July 15, 2019 at 3:45 pm

      Dear Claudia

      FTB has responded to your query as follows:

      Based on the value earned which is R7500 per month and we presume you are over the age of 65 years then you are below the tax threshold and do not require to file a tax return.

      Kind regards, YEI

  • Joanna
    June 30, 2019 at 1:07 pm

    Could you please let me know whether or not I should pay tax.

    I am 72 and the only income I have is from a fixed investment of which I received R189,000 last year.

    Iv’e been to the Tax office 3 times and they wouldn’t give me a tax number, said it was not necessary.

    Others tell me I have to still pay tax so now I am confused.

    Thank you kindly for your help, much appreciated.

    • Marilynh
      July 1, 2019 at 9:26 am

      Dear Joanna

      Your query will be sent to FTB for response.

      Kind regards, YEI

    • Marilynh
      July 15, 2019 at 3:43 pm

      Dear Joanna

      FTB has responded to your query as follows:
      The investment income could have a few components in it that could reduce the income to below the tax threshold which for a 72 year old would be R121000. Local Dividends are exempted, interest received exemption would be R 34500 and there is medical expenditure that can have a major impact in this circumstances. If you have proof your visits to sars I would say all is in order and you do not have to file.

      Kind regards, YEI

  • Joanna Prinsloo
    July 2, 2019 at 1:16 pm

    Sorry, my email above should read: an income of R126,000.00 for the tax year and not R189,000.00

    Kind regards,

    Joanna

  • Anne Mackenzie
    July 8, 2019 at 2:14 pm

    Hi there! I hope you can clarify this for me.
    Im 68 years old, divorced, unemployed but receive a Retirement Annuity which was R7500 per month for tax year 2019.
    I dont pay tax on the amount and Sars have already assessed me. They owe R000.
    My question is why wont they pay my chronic monthly medical expenses, doctors accounts and blood tests.
    Thank you in advance.

    • Marilynh
      July 10, 2019 at 8:53 am

      Dear Anne

      We have sent your query to the author of the Tax Guide for response.

      Kind regards, YEI

  • Annalene Sadie
    July 9, 2019 at 1:23 pm

    I am a pensioner, but my old employer still pays an amount towards group insurance and my medical fund ( reflected on an IRP5/IT3(a) form). Do I list myself as employed or unemployed?

    • Marilynh
      July 10, 2019 at 8:52 am

      Dear Annalene

      Your query will be put to the author of the Tax Guide. His response will be featured in this forum, once we have received it.

      Kind regards, YEI

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