What documents should you have ready when you're submitting your tax return?

Charné is a Registered Tax Practitioner and has written several magazine articles with financial related themes since 2006. She is a known finance and tax expert working as an adviser at lemons into lemonade financial planners cc.

Although there is a list available on the SARS website of what you need to prepare for your annual tax return, there is still some confusion about what each of these documents involve.  Here's a detailed guideline of the documents that you should have ready.

Read more: What to do if you’ve never submitted a tax return

Prepare documents per tax year

A tax year is from 1 March of one year to 28 February of the following year. 

Keep documents per tax year and, remember, if you want to claim for expenses you paid, the date of payment must fall in that year even if the invoice date is outside of the tax year.

Salary or pension income

Your employer must give you a hard copy IRP5 even if it appears on eFiling.  Your personal and bank details must be correct otherwise you need to ask your employer to first change it and re-issue the IRP5.  By law, you need to receive salary slips and also keep them to check against your IRP5 at the end of the tax year. 

If you have a travel allowance, you must keep a logbook according to SARS requirements. 

This means you cannot only keep track of your business trips but also all the personal trips in between.  You need to give details of each business trip (for example: client name and where you drove to).  Driving between your home and office is not considered business kilometres.

For any other allowances that you receive on which you want to claim expenses, SARS will require you to prove that you paid for it yourself.

You can only submit a home office claim if its allowed by SARS on your type of salary income and if you have a dedicated area at home that is not used for anything else than office work. 

If you have normal salary income, you will have to be able to prove to SARS that you are required to work from home by your employer.

Medical Expenses

Apart from the medical aid’s tax certificate for the year (that shows the total contributions of you and your family’s medical aid), you must also keep proof of payment of all medical expenses that you could not claim from your medical aid.

If you are permanently disabled and claim extra medical expenses,  please contact SARS for the correct forms you need to complete to prove your disability.

Investments and/or Policies

For any interest that you earn on any investment accounts (bank accounts,  money market accounts,  fixed deposit accounts,  unit trust investments),  you must request an IT3(b) certificate from the bank or company for the specific tax year. 

With unit trust investments,  you must also ask if there is an IT3(c) certificate,  which shows the profit you made if you cashed in the investment (or part of it). Even though a tax free investment is not taxed, it must be declared.

Retirement annuities are tax-deductible but not endowment policies.  Income protector policies (a policy that covers your income if you cannot work temporarily or permanently due to illness or an accident) is no longer tax-deductible.  

Other income than salary

For any other income you earn (other than your salary) like freelance jobs and rental income:

• keep bank statements, 
• proof of payment
• summaries of your income and expenses (mention the date your received or paid it,  who you paid or from whom you received income and the exact amount in Rands and cents).
  

In some cases you may need to provide SARS with financial statements and then you need to get help from a tax professional.

If you have your own business or if you are a director of a company or a member of a Close Corporation, SARS will require you to complete a balance sheet.  This is a list of your assets and liabilities (debt).  You use the market or cash value that each asset or liability had on the last day of the tax year.  Get help from SARS or a tax professional if you are not sure what information to submit.

Read more: How to manage your money in 12 months

Donations

You can claim certain donations that you made to non-profit organisations. Such an organisation must be registered as a non-profit organisation according to South African laws and must also be listed at SARS as a recognised non-profit organisation.  If you would like to claim donations,  check this with the specific organisation you want to support.

Lastly, the best way to prove to SARS what you earned or claim as expenses, is to provide SARS with bank statements. 

Keep statements as you receive them from the bank via email or post, download the formal statement monthly using internet banking or get them from a branch. 

To request older bank statements from the bank if SARS asks to see them, can cost you unnecessary bank charges.

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