Here’s what you do if you owe SARS money. Picture: Pixaby.
Tax return: Here’s what to do if you owe SARS money
Here’s WHY and what to do if, instead of a refund, you owe SARS money after you’ve completed your tax return.
Here’s what you do if you owe SARS money. Picture: Pixaby.
2023 tax season has been open for individual taxpayers since 7 July 2023. What if after you’ve completed your tax return, instead of a refund, you’re notified that you owe SARS money?
Here’s how that might’ve happened and what you must do …
WHY DO I OWE SARS MONEY?
Perhaps you miscalculated your figures, or you simply weren’t paying attention throughout the year, but if you have an amount you need to settle with SARS, it means you’ve underpaid tax on your income throughout the year.
ALSO READ: Why you MUST complete a tax return even if you earn less than R500 000
According to the experts at TaxTim, this might’ve occurred if you’ve worked for two or more employers during the tax year. Any of these employers may have withheld PAYE (Pay-As-You-Earn) tax from the salary they’ve paid you.
ALSO READ: The REAL reason why your tax refund isn’t bigger
It’s simple, if an employer is unaware of your total annual salary (all your incomes combined) they might not be deducting as much tax as they should. If you’re not taxed enough during the year and you owe SARS money, you will have to settle accordingly.
TRAVEL ALLOWANCE
It’s not uncommon for people with a travel allowance through work to be undertaxed. 80% of your travel allowance is subject to monthly PAYE tax. However, if your total business mileage is too low – less than 20% of your total – you could end up owing SARS money.
ALSO READ: Putting off your 2023 tax return? Here are 12 pointers to help
TaxTim advises if your work situation changes and you’re driving less than you used to, you should speak to your employer about changing your arrangement. Similarly, if you travel for work and do not keep consistent, accurate logbooks of your trips, you could be undertaxed and owe SARS money.
EARNING EXTRA INCOME
There are many ways people can earn extra income, and in this economy we all need to earn as much as we can. Whether it be from a pension grant, unemployment fund payout, or renting out space/equipment (which you should always declare on your income tax return), to receiving interest on investments. If you’ve paid no or too little tax, you will owe SARS money.
ALSO READ: Need tax return HELP? Here’s where you’ll find all SARS mobile tax units
TaxTim reminds us that if you earn income from an investment, there is a tax-free threshold. If you’re under the age of 65, the first R23 800 of interest is exempt from tax, over 65 years of age is R34 500. If you have not paid enough tax on your investment income, it is possible you will owe SARS money.
30 DAYS TO PAY SARS
If after your income tax return is filed, it turns out you owe SARS money, the due date for payment will show on your Notice of Assessment (ITA34). In general, payment is due 30 days after an assessment has been issued.
The deadline for income tax return submissions is October 23 2023.
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 like TaxTim.
Tags:
