Tax season can be stressful, and it’s easy to make mistakes that could lead to delays, penalties, or even a SARS audit. Here are five common pitfalls to watch out for when filing your annual tax return.
1. Missing the Deadline
This is the most obvious but also one of the most common errors. Filing your tax return late without a valid reason will result in administrative penalties from SARS. Mark the tax season deadlines in your calendar and aim to file well in advance.
2. Incorrectly Claiming Deductions
Many taxpayers either forget to claim valid deductions (like medical aid credits, retirement annuity contributions) or claim for expenses they’re not entitled to. Keep meticulous records of all potential deductions and ensure you have the necessary supporting documents (e.g., IRP5, medical aid certificates, RA contribution certificates).
3. Not Declaring All Income
Your salary might be your main source of income, but you must declare all other sources. This includes rental income, freelance or side-hustle earnings, and interest earned from investments. SARS receives data from third parties like banks and financial institutions, so they will likely know about any undeclared income.
4. Using Outdated Banking Information
If you are due a tax refund, SARS needs your correct banking details to pay you. An old or incorrect bank account will lead to significant delays in receiving your refund. Always double-check that your details registered with SARS are up to date.
5. Assuming You Don’t Need to File
Even if your employer deducts PAYE every month, you may still need to file a tax return. This is especially true if you earn income from more than one source or if your total annual income is above the tax threshold. Always check the latest SARS requirements to see if you are obligated to file.
