What Information should you gather now for your Personal Income Tax return?

As with most things in life, it is better to be proactive rather than reactive when addressing issues. For getting your income tax return filed on time this is also the case. Here is a list of the most common information that should be gathered well in advance of actually doing the income tax return.

• Firstly it is a good idea to get your IRP5 certificate for your employer. SARS should have this information already, as your employer also submit it to SARS during the employees tax reconciliation process. If there was a problem during this process, your IRP5 information will not be pre populated into your return and you will have to complete it yourself. SARS may also ask that you product the original certificate.
• You will need our IT3(b) certificates from financial institutions. This certificate indicate all interest and dividends that you received during the financial year. Also be sure to have the balances of the capital on the last day of the financial year. You will need this information if you need to complete a balance sheet for SARS.
• If you also have another source of income, like renting out a room or flat, or a hobby from which you earn income you will have to declare it. Any expenses you incurred while earning the income, can be offset against the income. It would be wise to have a tax advisor to help you with this.
• You should also receive your Medical aid contribution certificates and your Retirement Annuity contribution certificates in the post or via e-mail. You should keep these or save it when you receive it, so that is is available when you are ready to send your information to your tax consultant. Also keep any slips for out of pocket medical expenses as you incur them during the year.
• You can also claim for any income protection premium paid to insurance companies. This is to protect you should you be unavailable to work for a period of time. these premium are tax deductible and any money you receive for claiming are taxable in your hands. Normal life insurance is not deductible.
• If you receive a travel allowance, you must be sure to write down your ending kilometers for the year. You also need to be sure you have your log book for the financial year and that it is complete. You will be unable to claim any deduction against your travel allowance received if you have no detail logbook.
• Lastly you will need to consider if you sold any of your assets and made a profit or loss from it. Personal items, like a motor vehicle and or jewelry does not have to be declared as it does not influence Capital Gains Tax (GCT). There is however some exceptions. It would again be wise to discuss this with a tax advisor.  Assets from which you earned income, like share or until trusts, a property will however influence CGT. The sale of a property, either that you lived in yourself or a property that you rented out is the most common example. Detailed records of the transaction need to be kept as proof, and provided to your tax advisor.

In dealing with SARS you want to be ahead of the curve. If you have your information ready when the tax season opens, filling your return and getting your refund will be a much less painful process.