tax

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Should you file a tax return if you earn less than R500k?

SARS says you don’t need to but failing to file a tax return in 2023 could see you miss out on a healthy refund. Here’s why.

tax

Image via Adobe Stock

The 2023 filing season started on 7 July 2023, and the deadline to file a tax return is October 23 2023 for individual taxpayers. If you’re unsure if you should file a tax return because you earn less than R500k per year, think again.

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True, in SARS’ list of guidelines for 2023, it says anyone earning less than R500k per year does not need to file a tax return. However, the specialists at TaxTim advise otherwise. And here’s why …

SHOULD YOU FILE A TAX RETURN IF YOU EARN LESS THAN R500K?

file a tax return
Here’s why you should file even if you earn less than R500k. Picture: File.

The short answer is YES! If you do not file a tax return, you have zero chance of receiving a tax refund. Failing to complete a tax return means you’re allowing the government to 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 tax return.

IT IMPACTS YOUR CREDIT RECORD

file a tax return
Why you should file a tax return even if you earn less than R500k. Picture: File.

You may not need it know, but if you don’t file a tax return and you need to borrow money in the form of home loan in the future, you’ll need a Tax Compliance Certificate (TCC), says TaxTim. You won’t be eligible for a TCC if all your returns are not up to date and filed appropriately.

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If you file a tax return every year but do not do so this year, it’s not impossible that SARS could penalise you. This can happen years down the line, if they look through your tax affairs and find uncompleted returns.

ACCESSING YOUR RETIREMENT FUND

Do you need to file a tax return?
Do you need to file a tax return? Image credit: AdobeStock

TaxTim advises that if you have a retirement annuity, you’re virtually guaranteed a payout from a fund. However, should you retire or be retrenched, you will need to be tax compliant to be able to remove money from the fund early. To do this you need to file a tax return every year.

TaxTim has a useful refund calculator you can use HERE. And don’t forget that you have until October 23 2023 to complete your taxes.

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.

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