Wednesday Feb 01, 2023

2022 tax filing season: Everything you need to know – Moneyweb

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The 2022 tax filing season, which opened on 1 July, runs until 24 October 2022 for non-provisional taxpayers, making it a shorter season than previous years. With less time to file your returns, it is important that taxpayers begin collating the necessary information and documentation so that the deadlines are met, and fines are avoided. If you are a provisional taxpayer, keep in mind that your deadline for submission is 23 January 2023.

Sars will once again be auto-assessing a large number of taxpayers, and it is important to understand how this process works and what deadlines apply. In performing the auto-assessment, Sars will gather information from third parties such as employers, financial institutions, retirement fund administrators and medical schemes – and will use this information to prepare an automatic tax return for you which you should be notified of via SMS at the beginning of the tax season.

While previously, taxpayers had to either ‘accept’ the auto-assessment or ‘reject’ it by editing the return, this year is different. If you are happy with your auto-assessment, you are not required to take any action. If you are not satisfied with your auto-assessment, you can access your tax return online, make changes, and submit it. However, it is important to note that taxpayers will only have 40 days from the assessment to file a return if they are not satisfied with their auto-assessment, meaning that time is of the essence.

Sars has become a lot stricter when it comes to imposing penalties for late submissions, with penalties being based on a taxpayer’s taxable income – meaning that penalties can range from R250 per month to in excess of R16 000 a month for each month that the taxpayer remains non-compliant, and can be charged for up to 35 months. Avoid being complacent when it comes to tacitly accepting the auto-assessment as it is possible that Sars is not in possession of all your information which may result in you paying more tax than is necessary or possibly missing out on a refund which may be due. If in doubt, rather seek timeous advice from a registered tax practitioner.

To determine whether or not you are required to file a tax return, it is important to understand the tax thresholds and what constitutes taxable income. The tax threshold for the 2022 year of assessment for normal taxpayers below the age of 65 is R87 300. For those older than age 65, income in excess of R135 150 is taxable, while for those over age 75 the threshold is R151 100. However, if you earn less than R500 000 from a single employer, have no other sources of income, and do not claim deductions for business expenses, you may not be required to submit a tax return.

Remember that, as a South African tax resident, Sars requires you to disclose all foreign assets and funds held during the 2022 tax year, as well as all foreign-sourced earnings regardless of the level of earnings.

According to Sars, income that you can be taxed on includes:

  • Income from employment (salaries, wages, bonuses, fringe benefits, etc);
  • Severance benefits;
  • Trade or business income;
  • Investment income such as interest, foreign dividends and dividends from Reits;
  • Rental income;
  • Income or profits arising from being a trust beneficiary;
  • Annuity income; and
  • Pensions.

To ensure that you claim for all available tax deductions and that you have all necessary information at hand, consider the following checklist:

Certificates

Your IRP5 and IT3(…….

Source: https://www.moneyweb.co.za/financial-advisor-views/2022-tax-filing-season-everything-you-need-to-know/

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