This guide explains how you, as an employee with common allowances and deductions, can submit your ITR12 tax return.
Do you need to file a return?
If you earn under R120 000 for a full year from one employer (total salary income before tax), receive no allowance, such as a travel allowance, and have no additional income or deductions for which you want to claim, you don't need to submit a return to the South African Revenue Service (SARS).
Step 1. Choose a way to file
If you do need to file a tax return, you need to decide how to do so. You can file your return on paper (manually), or electronically at a SARS branch or via eFiling.
Manually
If you want to file a paper return, you have only a few days left to do so: the deadline is Friday, September 18.
By now, you should have completed the Income Tax Return Request (ITRR) form that was posted to you, and you should have received a copy of the return. (If you haven't yet ordered a return, you can do so by calling 0800 00 SARS (7277), but it would be better to eFile your return or visit your nearest SARS branch for assistance with filing electronically, because you will probably miss the deadline.)
Your return should contain the fields you need to complete and should be pre-populated with information printed in pink ink. If the pre-populated information is correct, you don't need to do anything other than sign and submit your return to SARS.
If any of the pre-populated information is incorrect, you can change it by writing over the pink text in black ink. And if something is no longer relevant, you just draw a line through the middle of the text with black ink.
The scanners SARS uses to read the information on your paper return cannot read pink. So when your return is scanned electronically, all these scanners will pick up are the changes you have made. If there are no changes, SARS will simply use the information in its system, which is printed in pink on your return.
If you make a mistake on your paper return, you will need to obtain a new one from your nearest SARS office or you must telephone the call centre on 0800 00 SARS (7277).
Do not correct the error by writing above or around the relevant field, because SARS's scanners will not be able to read these corrections.
Electronically
In order to eFile, you need access to a computer with an internet connection and a working email address.
Your internet browser should be reasonably up to date and will need Adobe Acrobat version 8.1.
If you do not have access to a computer with this software, you can still submit your return electronically at your nearest SARS branch, where a consultant will help you.
You need to take all your documents to the branch, and the consultant will use them to complete your return before returning them to you.
The consultant will give you a printed copy of the return to check. Once all the details are correct, you can sign it. You will be able to keep a printed copy as proof of what you submitted.
SARS branches are open from 8am until 4pm. You can expect to wait between half an hour and two hours to see a consultant, depending on how busy the branch is. Popular times, such as first thing in the morning and lunch times, are the busiest.
If you plan to visit a SARS branch, you should try to do so soon before the rush near the deadline for submitting your return.
Step 2. Make sure you have what you need before you set off
As was the case over the past two years, you do not need to submit any supporting documents with your return.
If you are employed or receive a pension, some of the information from your supporting documents will already have been filled in on your tax return.
But you will still need your documents to check that what has been filled in is correct. And you will need to fill in the details yourself if your earnings are from business activities, or if you are self-employed or if you have deductions to claim.
So, before you sit down to complete your paper return or eFile or visit a SARS branch to fill in your return, gather together the following documents:
- One that shows the details of your bank account (this year it is mandatory that your details include your account number and branch code);
- Your IRP5 and/or IT3(a) certificates;
- The certificates you received for interest income earned if you are unmarried or married out of community of property, or the certificates received by you and your spouse if you are married in community of property;
- Financial statements that reflect any business income you earned;
- The certificates for retirement annuity (RA) contributions you made;
- Documents that relate to medical expenditure, such as a statement from your medical scheme at the end of February and proof of other medical claims not submitted to your scheme;
- If you receive a travel allowance, the details to calculate your travel claim - that is, your odometer reading at the beginning of the tax year and at the end of it, and details of your business travel and/or costs; and
- Any other documentation that relates to income that must be declared or deductions that you want to claim.
Remember that even though you do not have to submit any documents with your return, you must keep them for five years after submitting the return. SARS could, within this period, ask you to submit the documents to verify the information you have declared.
eFiling: Getting started
Before you can eFile for the first time, you need to register for eFiling.
If you eFiled previously, you should still be registered and you can skip to "Start eFiling".
In order to register, you will need your tax registration number/s, your identity number and your bank account details. Once you have obtained the necessary details, go to www.sarsefiling.co.za Click on the "Register" link. Then choose the "For individuals" link. Read and agree to the terms and conditions of becoming an eFiler on the SARS site.
Next fill in the required personal details. Then you need to choose a log-in name and a password, and answer a security question (such as what is your mother's maiden name or the name of your favourite pet). You also need to fill in a security PIN that appears on your screen. Click on the "Register" button and you will automatically receive your log-in name, to which SARS will add a four-digit number.
Start eFiling
Go to www.sarsefiling.co.za and click on the "Login" button. Enter your log-in name with the four-digit number that SARS added and your password.
If you have forgotten your user name or password, on the log-in page follow the "I forgot my login details" link. You will be asked for some of your details and sent your log-in name or password by SMS or email.
After logging in successfully, the first page to which you will be taken is called "The income tax work page". This page will show you if SARS has issued you with a return. You can open your return by clicking on the ITR12 link.
As you log in, you will receive a message that tells you that a return has been generated for you using the latest IRP5 and IT3(a) information SARS received from your employer/s and that if it is incomplete, it may be that your employer has not yet submitted all your information or that SARS may have been unable to match the information submitted by your employer to your tax return. Everybody gets this message, as SARS might not have received all your certificates from your employer/s.
It is up to you to check that the relevant employer-related information has been filled in. If not, you can wait for more details to be filled in before you submit the return.
Next time you log in from "The income tax work page", click on the button at the bottom of the page that reads "Refresh IRP5 data". This will update information from your IRP5 and IT3(a) certificates. Or you can use your IRP5 to fill in this information yourself.
If the pages of your return appear very small, you can zoom in by using the expand button on the top right-hand corner of the return.
If no income tax return is showing on this page, it means the registration process has not been finalised.
You need to telephone the SARS call centre on 0800 00 SARS (7277) to resolve the problem.
Build your return
The first page of your electronic return is a questionnaire, and by answering the questions, you build your return with the fields that are relevant to you.
Last year, everybody had to complete these questions. This year, just check that your answers to the questions are still the same as last year, and if not, amend them.
Your return will be generated with the same fields you had last year, unless you amend the questions.
Step 3. Check your personal details
Now you can move on to the page with all your personal details. Much of this section should already be pre-populated with your details, which you should check.
The online return will outline in red the blocks that you must fill in.
If you don't have an identity number and enter your passport number, watch out for the new field for the country in which your passport was issued.
If you enter a passport number, you need to indicate the passport country by way of a code, such as GBR for the United Kingdom and Northern Ireland, and EUU for the European Union.
Indicate your preferred method of communicating with SARS and your tax practitioner's details if you are using one.
Finally, check that your bank details are correct and, if necessary, fill in the new fields. This is very important because, if you are owed a refund, SARS will pay only by electronic transfer into this bank account.
SARS will this year verify if your bank details are correct, and this is why this year it is asking for your bank name and branch name in addition to your account number and branch code.
Step 4. Check your salary details
Now you are ready to move on to the next page of your return, on which all the information about your salary and the tax and deductions made from it is recorded. This section should already be filled in for you, with the name of your employer or pension fund and the income and/or benefits you received from your employer or pension fund as reflected on your IRP5 or IT3(a) certificate.
Check your employer details and the entries in the "Income received" section against the relevant codes on your certificates.
The information declared should include your salary, allowances, overtime pay, pension or annuities, fringe benefits, options or rights to buy shares, restraint of trade payments and bonuses.
There should be a total of all the amounts of non-taxable income, such as that from a reimbursive subsistence allowance; retirement-funding income, such as your salary, that is used to calculate your pension fund contributions; and non-retirement-funding income, such as allowances that are not included when your pension fund contributions are calculated.
The contributions you and your employer paid to your pension or provident fund, as well as your medical scheme contributions and any medical scheme contribution subsidy you received from your employer, should be recorded in the "Contributions/ deductions" section. Check these amounts against your IRP5.
The Standard Income Tax on Employees (SITE) and Pay As You Earn (PAYE) tax that your employer or pension fund deducted should also be recorded on the same page in the "Tax withheld and pay periods" section.
The number of pay periods in the tax year (for example, 12 periods if you are paid monthly) and the number of these periods that you worked (for example, six if you worked only half the year) should also be recorded.
If any of the information reflected on your return is incorrect, you need to correct it.
If any income or benefits you have received from an employer or pension fund and the tax deducted are not recorded, you can either fill it in yourself or, if you are eFiling, try again later to see if, by then, it has been entered. Use the "Refresh IRP5 data" button on the "The income tax work page" to update your return with new information submitted by an employer.
If you fill in the missing information on your return yourself, its processing may be delayed because SARS will have to verify the data you entered with that which it receives from your employer or pension fund.
You should get a page with similar fields for each IRP5 or IT3(a) certificate you received, because you should have stated the number of IRP5s and IT3(a)s when you filled in the Income Tax Return Request form for a paper return or the questionnaire on the first page of the electronic return.
Step 5. Declare your investment income
You need to perform this step if you earned any local or foreign investment income during the tax year.
If you have received local or foreign interest income or foreign dividends from more than one investment or financial institution, add the amounts of each together.
Remember to check for certificates that state the interest you have earned from your investments with banks, life assurers and unit trust companies.
Do not deduct the amount of investment income you are entitled to receive tax-free in terms of the exemption on investment income (R19 000 for the 2008/9 tax year if you are under the age of 65 or R27 500 if you are over 65 years). SARS's computers are programmed to deduct these amounts for you.
If you are married in community of property, you need to enter the total amount of local or foreign interest income or foreign dividends you and your spouse have earned. SARS's computers are programmed to split the amount you enter equally between you and your spouse.
Step 6. Fill in any taxable capital gains you made
You need to perform this step only if you made any local or foreign taxable capital gains or losses.
Each transaction that results in a capital gain or loss must be declared separately.
In each case, you need to declare the base cost of the asset of which you are disposing - this is the value at which you acquired the asset, plus the cost of any improvements or, if you acquired the asset before October 1, 2001, the base cost on October 1, 2001.
There are three methods of determining the base cost on October 1, 2001. If you need to determine this cost, consult the income tax guide on SARS's website (see "If you need help"). You also need to declare the proceeds you received when you disposed of the asset.
If the gain was made on a primary residence, you can enter the primary residence exclusion, currently up to R1.5 million, and deduct this when you calculate the capital gain you made.
Do not deduct the annual exclusion, R16 000 in the 2008/9 tax year, as this will be done by SARS.
You need to record your gain even if it is less than the exemption.
Also, if you made a capital gain and are married in community of property, do not split the gain. SARS will do this for you.
Step 7. Declare any other income you earned
Skip this step if you earned only salary, pension or investment income.
If, however, you earned business or professional income or even rental income, you need to fill in the "Local business, trade and professional income" section. Enter the details about your turnover, expenses, and profit and loss; or professional fees; or rental income and expenses.
You also need to fill in the statement for both your local and foreign assets and liabilities. The fields are fairly self-explanatory, but you may need to have available a few more documents and details to complete them, such as the outstanding amount on your mortgage bond and the value of your investments.
Step 8. Record your annual medical expenses
If you paid medical scheme contributions and/or had any significant medical expenses that you did not recover from a medical scheme, you should have indicated as much on your Income Tax Return Request form or on the questionnaire on the electronic return, and you should have the relevant fields in which to declare these expenses.
Important: If your employer paid medical scheme contributions on your behalf and/or deducted medical scheme contributions from your salary, this information should already have been recorded with your other salary details. You must not repeat the information in this section.
All you need to do is record how many dependants you had listed on the scheme, and answer the questions about expenses not recovered from your scheme - if you had these.
The field in which you need to "State your medical fund contribution not reflected on your tax certificate" next to the code 4040 should be filled in only if you paid your own contributions, for example, by debit order.
If your employer paid or deducted contributions from your salary, put a "0" in this field, as shown in the example on this page.
SARS will calculate how much of your contributions you are entitled to claim as a deduction, but to do so it needs to know how many people you had registered as dependants on your scheme in each month of the tax year. As long as your scheme registered a member of your family as a dependant, you can claim for contributions paid for that relative as a deduction.
So, for example, if you are the principal member and your spouse and one child were registered on the scheme as dependants for the first three months of the tax year, you need to enter the "Number of members" on your return as three for the first three months. If, in the fourth month, you had a second child and registered him or her on your scheme, record the number of members for the rest of the year as four.
For other medical expenses
You are also entitled to claim a deduction for certain medical expenses you paid for yourself or your dependants to registered medical practitioners, for medicines or to facilities such as nursing homes and hospitals, and that you were unable to recoup from your scheme.
Add up all these expenses and enter them in the field labelled "State your qualifying medical expenses not recovered from your medical fund (other than handicap/physical disability expenses)".
Record all qualifying expenses, and SARS will calculate what you are entitled to as a deduction. If you are over the age of 65, all qualifying medical expense will be allowed.
The deduction you are allowed is only for expenses that exceed 7.5 percent of your taxable income. This means you will probably be able to claim only your unrecouped expenses if these expenses were high relative to your income.
If you submitted all your medical expenses to your scheme, you will be able to determine your unrecouped medical expenses from the statement you received from your medical scheme.
If you, your spouse or your child is handicapped - for example, if you or one of your dependants is deaf or blind or requires a wheelchair as a result of a permanent disability - you can claim medical expenses incurred as a result of the handicap that you did not recover from your medical scheme in the section "Handicap expenses not recovered from your medical fund".
Similarly, if you, your spouse or dependent children have a physical disability - for example, if you wear glasses or suffer from diabetes - you can claim expenses incurred and not recovered from your medical scheme in respect of this disability in the section headed "Physical disability expenses not recovered from your medical fund".
Step 9. Declare your RA and income protection contributions
If you contributed to an RA, you need to state this in the questionnaire on the first page and then declare these contributions on your form in the section headed "Retirement and income protection contributions".
Even if you contributed to an RA through an employer and the information is recorded with your other salary details, you must fill in this section to qualify for a tax deduction.
Use the amount on the certificate you received from the institution to which you made the contributions or, if you are contributing to more than one RA fund, add up the amounts on each certificate. Any contributions to an RA that exceed the amount you are entitled to deduct will be carried forward to the next tax year as contributions.
Remember, you can claim only contributions made in your own name as a member of an RA fund. You cannot claim contributions made on behalf of your spouse or child.
If you paid premiums on a policy to protect yourself against loss of income as a result of illness, injury, disability or unemployment, you should receive a certificate from the institution to which the contributions were made.
Fill in the amount you paid in this section of the return.
Step 10. Claim travel expenses against an allowance
If your employer pays you a travel allowance because you use your vehicle for work purposes, your return should include a travel allowance claim section (if not, you need to amend the questionnaire in the electronic form or obtain a new paper return).
The allowance paid to you should be recorded in the income section of your return, and this should already be filled in for you. In this section you need to tell SARS how much of that allowance you actually spent on travel for work purposes. If you used more than one vehicle during the year for work purposes, you must state this in the questionnaire. Your return will then accommodate details for all vehicles.
The first question you need to answer is "Did you use a log-book to determine your business kilometres travelled?" This is because there are different ways you can claim against your travel allowance: you can either use the deemed mileage that SARS allows you to claim, or the actual mileage you have driven for business purposes and recorded. If you want to state the actual mileage, you should have kept a log-book of your mileage. You can then answer "yes" to the question on the use of a log-book.
If you use the deemed mileage method, and there is no information to the contrary, SARS will consider the first 18 000 km you travelled to have been for private purposes. Your deemed business mileage will be limited to 14 000 km. This means that if you travel less than 18 000 km for private purposes, you could be better off keeping a log-book of your business travel and claiming your actual business mileage.
Alternatively, if your business mileage is high and exceeds 14 000 km, you will also probably be better off claiming your actual mileage.
Remember, travelling between your residence and your place of employment is considered private, and not business, travel.
You also need to fill in your vehicle's registration number and its cash value or cost price. The cost price or cash value of your vehicle is the price including VAT that you paid for it when you bought it, but excluding any interest you have paid on a vehicle financing arrangement. You also need to provide the make and model of the vehicle and its year of manufacture.
Next, you need to tell SARS how long you have been using your vehicle for business purposes. If, for example, you have been using the vehicle for the whole tax year, fill in the "Starting date" as March 1, 2008 and the "Closing date" as February 28, 2009. If you used your vehicle for business purposes for only part of the year, the deemed mileages must be used pro rata.
In the fields on your return marked "Opening km" and "Closing km" you need to fill in the odometer reading on your vehicle at the start of the tax year or when you started using your vehicle for work purposes, and the reading at the end of the tax year or when you stopped using your vehicle for work purposes. The "Opening km" should be the same as the "Closing km" you declared on last year's return if you received an allowance last year and did not change vehicles at the end of the tax year.
If you eFiled last year, you can look up your closing kilometres from last year's return by going to "The income tax work page" and looking on the left-hand navigation bar for the "Return history" link. You should then have access to all the returns you have eFiled.
The online return will calculate the total mileage for the tax year ("Total km") for you.
In the "Private km" field, fill in your private travel mileage or use the deemed mileage of 18 000 km. In the "Business km" field, fill in the actual mileage you travelled for work purposes as recorded in your log-book, or calculate your deemed business mileage by subtracting 18 000 km from your total mileage.
If you have accurate records of everything you spent on your vehicle during the tax year, you can enter your actual expenses for fuel and oil, maintenance and repairs, licensing and insurance, and wear and tear or lease payments.
Alternatively, you can leave these fields blank, and SARS will use the fixed scale of costs to calculate your claim against your allowance.
You do not have to calculate the amount you will be allowed to deduct from your taxable income as a claim against your travel allowance. SARS will work out the amount for you.
- Remember that next year's return is the last one for which you can claim deemed mileage. As of March next year, if you receive a travel allowance and want to claim for your mileage, you will need to keep a log-book of your business mileage.
Step 11. Claim any other deduction
There are only a few other deductions you are entitled to make from your taxable income if you earn a salary. These deductions include those for:
- Claims against a subsistence allowance you are paid if you are obliged to travel for business purposes and spend nights away from home;
- Donations you make to an approved public benefit organisation;
- Depreciation of an asset, such as a computer, you are obliged to use for work purposes; and
- Home office expenses if you use part of your home regularly and exclusively as an office.
If you want to claim any of these expenses, consult the income tax guide (see "If you need help").
Step 12. Check your likely assessment
Now you have completed your return, and if you are eFiling, there is a quick way to check the likely outcome of your assessment (what you owe SARS or what SARS owes you).
You need to click "Save online" and return to "The income tax work page". Look at the bottom of the page for the "Tax calculator" button. This will generate a tax calculation that will give you an idea of what your assessment will look like and whether you will need to pay SARS more tax, whether SARS will refund you or whether you have paid just enough tax. If the answer is very different from what you expected, it could be because you have made an error on your return and need to check it. If the answer is in line with what you expected, you are probably ready to submit your return.
Step 13. Submit your return before the deadline
If you are filing a paper return, you need to post it in the self-addressed envelope supplied by SARS or drop it off at a SARS branch by Friday, September 18. (If you are posting your return, it must be in a mail box by that date.)
If you are eFiling or visiting a SARS branch to submit your return, you have until Friday, November 20, to submit your return. Do not leave this to the last minute. As the deadline approaches, more people will be accessing the SARS eFiling website ( www.sarsefiling.co.za) and SARS branches, and it is more likely that you will take longer to complete your return.
The earlier you submit, the quicker your return will be assessed and any refund due to you paid.
To submit your electronic return, open it and click on the "File" button.
If you have forgotten to fill in something that you should have, you may now be prompted to do so. Remember, however, if you have not answered the questionnaire correctly and have not added the relevant sections of your return, SARS's computers will not be able to prompt you to correct that error.
Once you have hit "File", you should receive a message confirming that your return has been filed.
Step 14. Getting an assessment
Once you have submitted a return, it will be assessed by SARS and you will be sent a Notice of Assessment (ITA34) that states what you owe SARS or what it owes you by way of a refund and how SARS calculated this amount, including what deductions (if any) SARS allowed or disallowed.
Currently, the average turnaround time for the assessment of returns submitted electronically is just 48 hours (assuming the return is completed correctly and honestly)!
You can check on the status of the processing of your return by using the "Status update" button on your "Income tax work page".
SARS may also inform you that it wants to investigate your return further or ask to see your supporting documentation.
If you get an assessment and you do not agree with SARS's calculation, and you can see that a mistake has been made (such as a simple typing error that transposed digits), you need to complete and submit a Request for Correction (RFC) form - available online from your "Income tax work page", at a SARS branch or call the SARS call centre.
If all the information is correct but you disagree with what was allowed or disallowed on a matter of interpretation of the Income Tax Act, then you can lodge a Notice of Objection.
For the first time this year, you will also receive a Statement of Account (ITSA) with your assessment notice, showing you a history of your interactions with SARS.
Warning
Disclose all information on your return fully and accurately. You could be liable for penalties and/or additional assessments (together with interest) and/or prosecution if you misrepresent yourself or if you neglect to furnish or omit relevant information.
If you need help
For technical problems, phone the SARS call centre on 0800 00 SARS (7277). For questions about how to fill in your return, look at the guides SARS has prepared. Go to www.sarsefiling.co.za and follow the "Forms and guides" link. Look in the "Individuals" section. You can also go to www.sars.gov.za and follow the "2009 Tax Season" link to find a list of relevant guide documents. Alternatively, you can call or visit your local SARS office.
- This supplement was compiled by the South African Revenue Service and Personal Finance.