Five simple strategies to reduce your taxes in 2024

Tax season begins this Monday, July 15, and here are the best methods to save on taxes in 2024. Individual (non-provisional) taxpayers must file their returns by Monday, October 21, 2024. Thanks to the experts at TaxTim, here are five easy ways to save on tax in 2024.

SAVE ON TAX IN 2024

Everyone’s tax affairs differ, of course, so all five may not be applicable to you. But take a look at the list and you’ll be able to save yourself a fair bit of money from the South African Revenue Service (SARS) if you apply yourself.

1. TAX-FREE SAVINGS ACCOUNT

You’re taxed on earnings from any investments you may have. TaxTim says the South African Revenue Service often under-taxes these throughout the year. Meaning you might end up owing the taxman money when it comes time to submit your tax return. Nevertheless, almost all financial institutions offer tax-free savings accounts.

The likes of Investec, Santam, Discovery, Standard Bank, Old Mutual all have such products. And they’re comprised of a combination of unit trusts, fixed deposits, bonds and other financial products. When you withdraw your growth/earnings on this type of investment, it’s tax free. Interest and dividends earned is tax free up to a limit, too:

• R36 000 per tax year.
• Lifetime limit of R500 000.

2. INVEST IN A RETIREMENT ANNUITY

This is a well-known way to save on tax in 2024. Contributions towards any pension/ provident fund or retirement annuity (RA) are tax deductible up to a limit of 27.5% of the greater of your taxable income (maximum of R350 000 per year). Don’t worry if that sounds a little complicated.

What you need to know is if you ever have excess cash, you should top-up your retirement savings with it to save. You can also have a number of RAs over and above the pension and provident fund contributions structured by your primary employer. Note, however, that you can only access these retirement funds when you turn 55-years old.

3. CHARITABLE CONTRIBUTIONS

TaxTim says a contribution to a non-profit or Public Benefit Organisation (PBO) has special approval from SARS. These organisations will most likely be involved in healthcare, education, poverty alleviation, housing, conservation, environmental and culture. Contributions to registered PBOs are tax deductible up to a limit of 10% of your taxable income. Click the link of SARS approved PBOs HERE. To claim the tax deduction, you must ensure you obtain the correct tax certificate from the PBO.

4. LOG ALL WORK TRAVEL

A travel allowance – if you receive one – is part of your taxable income and is a great way to save on tax in 2024. Otherwise known as a fringe benefit, SARS includes 80% of the travel allowance for tax purposes. But if you keep a detailed logbook of business mileage, you can claim a travel deduction. Check out TaxTim’s Travel Deduction Calculator HERE.

5. JOIN A MEDICAL AID

If you contribute to a Medical Aid throughout the year you receive a fixed monthly tax credit. You get this as the primary member, plus further credits for every dependent thereafter. SARS calls this the Medical Schemes Fees Tax Credit, it doesn’t take your taxable income into consideration and is a direct way to save on tax in 2024.