Tax tips for a good return: expert advice from a financial adviser  

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As we enter a new tax year this March, it is the perfect moment to refresh your financial strategies and set the stage for a prosperous year ahead.

The start of the tax year is not about filling out forms; it is an opportunity to take control, optimise your financial position, and prepare for whatever lies ahead.

JJ van Wyk, executive financial adviser from Momentum Financial Planning, says now is the time to prepare to optimise your tax returns, reduce unnecessary tax burdens, and avoid last-minute stress.

“Tax season is not just about compliance; it is an opportunity to review your finances, take advantage of deductions, and plan for better financial outcomes,” advises Van Wyk.

“With the know-how, you do not have to dread your tax return, and you should not take your inevitable auto-assessment as set in stone.”

Considering your taxes reflect your financial record and your financial future, Van Wyk provides key steps to ensure you’re ready for the tax season:

Understand your tax position
The first step is knowing where you stand with SARS. Stay informed about tax changes that may impact your return and ensure you have all necessary documentation, such as IRP5 forms, medical aid certificates, and investment statements.

Maximise retirement savings for tax benefits
Contributing to a retirement annuity (RA) or pension fund secures your future and offers tax deductions. Van Wyk explains, “You can deduct contributions of up to 27.5% of your taxable income, capped at R350,000 annually, reducing your taxable income and boosting your savings.”

Leverage medical aid tax credits
If you pay for medical aid, you may qualify for tax rebates under the Medical Schemes Fees Tax Credit. SARS allows a fixed monthly rebate per member and dependant, reducing your overall tax liability.

However, ensure you are the one benefiting from the tax credit, as some employer contributions may already factor this in.

Claim eligible deductions
Van Wyk says many people miss out on valuable deductions, such as donations to Public Benefit Organisations (PBOs) with Section 18A certificates, home office expenses (if applicable), and qualifying travel costs.

“You can donate up to 10% of your taxable income and claim a deduction, provided the charity has a valid certificate,” notes Van Wyk.

Check your PAYE contributions
Employees paying tax through Pay-As-You-Earn (PAYE) should verify their employer has deducted the correct amount throughout the year. This ensures you are not overpaying or underpaying tax, which could lead to unexpected liabilities.

Review your investment tax efficiency
Interest income, dividends, and capital gains are all subject to tax. Ensure your investments align with tax-efficient strategies, such as tax-free savings accounts, which allow for tax-free growth and withdrawals within limits.

Seek expert advice
Tax planning can get complicated, and there is often more to it than meets the eye. If you want to make the most of your tax return, speaking to a financial adviser can be a game-changer.

“A proper adviser can easily help you navigate the finer details, spot opportunities you might have missed, and ensure your finances are working in your favour,” notes Van Wyk.

With the tax return season around the corner, proactive planning can lead to significant savings and financial advantages.
Act today to ensure you are fully prepared when July arrives.

“A little preparation now means fewer surprises later and a more rewarding tax outcome,” concludes Van Wyk.