We often receive enquiries from individuals pondering this exact same question – What is tax?
Taxing both individuals and businesses is vital for the government to maintain the country. The money collected via taxes is used to fund government expenditure. The government’s expenditure includes financing hospitals, schools, roads and emergency services.
In terms of an individual, the following forms of income are included in taxable income:
- Income from employment (salaries, wages, bonuses, overtime, benefits, allowances and lump sum benefits);
- Profits or losses from a business or trade;
- Income or profits from being a beneficiary of a trust;
- Director’s fees;
- Investment income;
- Rental income;
- Income from royalties;
- Annuities;
- Pension;
- Capital gains.
Who should pay tax?
SARS gives us a very useful tool that we can use to determine if we should be submitting personal returns or not: http://www.sars.gov.za/TaxTypes/PIT/Pages/Do-you-need-to-submit-a-return.aspx
Here are guides to both 2017 and 2018. You are liable to pay income tax if you earn more than:
2017
- R75,000 if you are younger than 65
- R116,150 if you are older than 65
- R129,850 if you are older than 75
2018
- R75,750 if you are younger than 65
- R117,300 if you are older than 65
- R131,150 if you are older than 75
Remember, if you receive more than one IRP5 or have more than one source of income, you may be liable to pay more tax than you already have as you may have been pushed into a higher tax bracket. Additionally, if you receive a car allowance, have medical aid or a retirement annuity, or you would like to claim expenses (such as travel), you will have to file a return regardless of the thresholds listed above.
Contact us and let us check your personal tax situation for you: 012 880 0939 or info@taxdebtrelief.co.za
