With tax season upon us, here at Leading Edge, we want to ensure our clients are clued up on the latest developments. This year, SARS has ramped up its use of auto-assessments, a process that can be convenient but also comes with some hidden risks.
What is an auto-assessment?
An auto-assessment is exactly what it sounds like: SARS automatically calculates your tax liability based on information they’ve collected from third-party sources like employers, banks, and medical aids. While it sounds simple, there’s a catch – you don’t have any say in the matter.
How will I know if I’ve been auto-assessed?
If you’re among the lucky (or unlucky) ones chosen for auto-assessment, you’ll receive an SMS or email notification from SARS between 1 July and 14 July 2024.
Hold on, should I just accept it?
While the convenience of a pre-done tax return is tempting, our advice at Leading Edge is to proceed with caution. Here’s why:
- Accuracy Concerns: SARS might not have received all your tax certificates, or the ones they have might be outdated. This could lead to an inaccurate assessment, potentially costing you money.
- Missing Deductions: Auto-assessments often overlook deductions you’re entitled to claim, such as home office expenses, travel costs, charitable donations, and medical bills. These deductions can significantly reduce your tax bill.
So, what should I do?
We recommend filing a complete tax return to ensure all your income and deductions are accounted for. This maximizes your chance of getting the biggest possible refund.
Tax Season Deadlines
The deadline for filing your tax return, even if you’ve been auto-assessed, is the same as salaried employees – 21 October 2024. Missing this deadline comes with administrative penalties from SARS, so don’t procrastinate!
What if I already received a refund from the auto-assessment?
No worries! If you have additional income or deductions to claim, you can still file a full return with Leading Edge. When you do, SARS will issue a new assessment reflecting your actual tax liability. This could result in a further refund if you had additional deductions, or a slight tax payment if you had unreported income.
Let’s Connect. Get in touch with Dewald Rossouw (Cape Town) or Monique Steyn (PE) today!
Remember, it’s your responsibility
Accepting an auto-assessment doesn’t absolve you of responsibility. You’re still obligated to report all your income accurately. If SARS discovers discrepancies during an audit, you could face penalties of up to 200% of the unpaid tax, plus interest!
Leading Edge is Here to Help!
Tax season doesn’t have to be a stressful game. At Leading Edge, our tax experts can help you navigate auto-assessments, ensure you claim all your deductions, and get the best possible tax outcome. Contact us today to discuss your individual tax situation.
