There are many ways to improve your tax savings strategy and with the end of the financial year fast approaching, you may want to take advantage where you can.
Furthermore, these tax-saving methods can help you in the upcoming fiscal year and beyond.
If you use your personal vehicle for work purposes, you have the opportunity to claim a deduction on your traveling costs.
However, you must be able to prove to SARS that you in fact make use of your vehicle in order to carry out our business functions.
The easiest way to do this is to keep a logbook of the kilometres you have travelled along with approval from your employer to make a claim on your travel expenses.
As opposed to other forms of investment, all the interest income earned on a tax-free investment is completely exempt from tax.
However, you cannot contribute more than R33 000 per year into your tax-free savings account and you are limited to a lifetime contribution of R500 000.
Should your contributions exceed these limits then you will be subject to at least 40% tax liability on the excess for that specific tax year.
Donating to a public benefit organisation allows you to claim deductions against taxable income. However, it’s important to know that your deduction is limited to 10% of your taxable income before claiming the deduction of the donation.
In addition, it’s important to remember that you will need to supply SARS with a Section 18A certificate from the organization to which you made donations.
Taxpayers may claim deductions for their medical scheme contributions and, depending on the number of members or dependents on your scheme, you may claim for more credits.
Furthermore, taxpayers qualify to claim for out-of-pocket medical expenses which are not covered by their medical schemes.
It’s important to remember that medical scheme tax credit is a deduction to tax payable instead of taxable income, which is the amount on which the tax liability is calculated.
There are many other smart ways to improve your tax savings strategy. Therefore, it’s important to work closely with one of our qualified financial advisors who can help you develop a way to save with your tax deductions.
This can contribute massively towards you achieving your overall financial goals, as it forms an integral part of your financial plan.
For assistance with setting up your financial plan, or to speak to one of our qualified advisors, please contact us.
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