Video: Use your tax deductions before 29 Feb

As this is a leap year, 29 February marks the end of the financial year. All information up to this date will be included in your 2019/2020 tax return. This includes all tax deductions.

Top-up your retirement fund

You can invest up to 27.5% of your income, tax free, into a retirement fund – this is up to a maximum of R350 000. It is a great way to reduce your tax burden while securing your retirement.

Top-up your tax-free savings account

If you haven’t already maxed out your annual tax-free savings allowance of R33 000, pay in a lump sum before the end of February.

Work out your travel expenses

Write down your odometer reading if you claim business travel expenses. You also need to be keeping a log book which you will have to submit with your tax return later in the year.

Sort out your admin

File all expenses that you are able to claim as tax deductions, including medical expenses. If you don’t have copies, request statements and proof of payment. If you are claiming medical expenses, ideally you should try put all medical expenses through your medical scheme, even if they do not pay, since it provides a single record for SARS and makes it easier when the time comes to complete your tax return.

Consider 12J investments

If you have R100 000 to invest and are looking for some tax relief, consider investing in a Section 12J Fund. This is a tax incentive by government to encourage investment into certain sectors. Any upfront investment is fully tax deductible, however, the investment must be held for at least five years and incurs capital gains tax on the full value on exit.

Assess your capital gains tax

If you are planning on selling assets such as shares or unit trusts, by phasing the sale over February and March you spread the tax burden over two financial years and benefit from the R40 000 tax exemption per tax year.

Make sure you have your paperwork up to date. This takes away the stress of finding these documents when the time comes to file your tax return.

         

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