Here’s why you MUST complete a tax return even if you earn less than R500 000

SARS eFiling season – the time to complete a tax return – opened on 7 July 2023. It runs until October 23 2023 for individual taxpayers.

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In SARS’ list of guidelines for 2023, it says anyone earning less than R500 000 per year does not need to complete a tax return. The specialists at TaxTim advise otherwise. And here’s why …

WHAT IF YOU’RE DUE A TAX REFUND?

Quite simply, if you do not complete a tax return, you won’t know if you’re due a tax refund. Failing to complete a tax return means you’re letting the government keep all your money.

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A refund is paid out to a taxpayer who has overpaid on their taxes throughout the year. It is your money, it’s not a bonus or 13th cheque, it belongs to YOU. You can only get a refund if you file a return.

IT IMPACTS YOUR CREDIT RECORD

You may not need to now, but if you want to borrow money in the form of home loan one day, you will need a Tax Compliance Certificate (TCC). You won’t be eligible for a TCC if all your returns are not up to date and filed appropriately.

ALSO READ: Unhappy with your tax return? Here’s how you can lodge a COMPLAINT

SARS CAN PENALISE YOU

If you file a return every year but do not this year, it is not outside the realm of possibility that SARS could administer administrative penalties. This can even happen years down the line, if it looks through your tax affairs and finds incomplete returns.

ACCESSING YOUR RETIREMENT FUND

TaxTim advises that if you have a retirement annuity and complete a tax return each year, you should receive a payout from a fund. However, should you retire or are retrenched from your job, you will need to be tax compliant to be able to take money out of your fund early. To do this you need to complete a tax return every year.

COMPLETE YOUR TAX RETURN

If you needed any more reason than the prospect of a refund, there’s this one … Showing a consistent, unbroken eFiling record ensures that SARS officials have no reason to look into your tax affairs. It’s a form of good citizenship.

ALSO READ: 2023 Filing is OPEN: Here are 8 tips to help with your tax return

TaxTim has a useful refund calculator you can use HERE.

This article is for informational purposes only and should not be construed as financial, tax or legal advice. For further details consult the SARS website or get in touch with a tax specialist, like TaxTim.