The tax season is upon us again. To make sure you know where you stand , Kevin Watson, CEO of Sprout Consulting, offers sound advice.
What is tax season? Typically the tax season is the period in which individual tax returns are submitted. The tax year for all individuals runs from the beginning of March to the end of February every year. Companies and Close Corporations can have a tax year end at the end of any month of the year.
What are the different types of taxpayer requirements? There are two categories for paying tax. Let us have a closer look at each one.
INDIVIDUALS AND SOLE PROPRIETORS
Completed tax returns must be posted/dropped off at SARS by September 30, 2015, if using the manual/postal returns or filed on e-filing. If you use e-filing and are a non-provisional taxpayer, you must submit by November 27, 2015. If you use e-filing and are a provisional taxpayer, you have until January 29, 2016.
Who must submit a tax return? If ALL of the following apply to you, you may not have to submit an Income Tax Return:
Your total employment income is less than R350 000 for the year.
You received employment income from one employer during the year.
You don’t have allowable tax deductions to claim – medical expenses, retirement and so on.
You have no car allowance or other form of income – interest, rent and so on.
Who is a provisional taxpayer? Provisional taxpayers generally derive income in forms other than remuneration, like sole traders, partners, members’ of a CC or directors of a company. Rental on an investment property and interest on investments are examples of non-remuneration income. You must determine whether you’re a provisional taxpayer. Failure to submit a provisional tax return will incur penalties and possibly interest. Provisional tax returns are due on August 31 and February 28 every year.
COMPANIES AND CLOSE CORPORATIONS
These businesses can have their year end at the end of any month in the calendar year.
Registered taxpayers are required to submit annual tax returns within 12 months of the end of the financial year.
In addition to annual returns, businesses are required to submit provisional tax returns every six months. These must be submitted six months prior to the year end and contain estimated figures of tax for that period. Payment must accompany the return.
Smaller companies can be on either Turnover Tax, where the annual turnover of the business is below R1-million, or Small Business Corporation Tax where turnover is less than R20-million per annum. Terms and conditions apply.
We encourage you to sit with your tax advisor and understand your tax obligations and opportunities.
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