As the deadline for filing tax returns approaches, many South Africans are now rushing to avoid late penalties, by filing their returns. However, the reality is that they could be losing much more than this by failing to implement proper financial planning.
According to John Marsden, National Sales Director at PPS, the financial services company focused on graduate professionals, there are a number of tax incentives that consumers can take advantage of, yet due to inadequate financial planning, they often fail to do so. “Many South Africans avoid filing income tax returns until the very last minute. However, by taking the time to speak to a qualified financial planner early enough, they could structure their financial affairs to maximise the tax benefits available to them.”
Latest figures from SARS show that three million income tax returns have so far been submitted, 15% higher than last year. However, this is still far short of the total number of returns that need to be filed.
Jolandi Wassermann, Head of Governance at PPS, says that there are a number of tax incentives that consumers can make use of, particularly for those professionals who may run their own business, such as:
· General operating expenses incurred in the production of income, such as office expenses, telephones and staff costs
· Equipment and computers
· The expense of operating from a home office
· Retirement funding, such as retirement annuities
· Income replacement policies
“The penalty for filing an income tax return late, starts at R250 per month. Moreover, the cost of not structuring one’s financial plan properly could run into the thousands. At this time of year, many consumers only consider the tax benefits that arise from their employee benefits or medical schemes. Yet, there are many more benefits available to consumers and it is essential that people take the time to investigate those that are available to them”, says Wassermann.
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