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5 Benefits of Filing Your Income Tax Return

Finance & Money

Posted on Wednesday, August 3, 2022

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Tax season is here! If you’re tempted to skip filing this season, the benefits may change your mind. Here’s what you need to know.

 

Filing a tax return can seem daunting because no one enjoys financial admin! But whether you have to file or not, there are perks to processing your return. Here are a few reasons why filing your tax return is important and things to keep in mind this season.

 

1. You may get a refund

Good news! You may be paying too much tax, and if you are, you qualify for a refund. The

The catch is that you’ll only be able to access it if you’ve been filing your tax return regularly. Some reasons that could qualify you for cashback are:

 

  • overpaying for medical expenses if you have medical aid
  • having a dependant, in some cases
  • having a retirement annuity

 

2. You’re more likely to qualify for credit

If you need to apply for a long-term loan (e.g. a bond) you need a tax compliance certificate. This can only be accessed if your returns are up to date.

 

3. You’ll prevent penalties later on

Tax regulations change now and then, so it’s important to file every year to prevent penalties. For example, you are required to file a return if you earn more than R500 000 per year, but there are some other conditions which you can take a look at here. The threshold could increase or decrease yearly. If your annual income is less than the filing threshold, you should still consider filing if you have a retirement annuity and medical aid as you may qualify for a refund.

 

4. Easier access to your retirement fund

Retirement annuities, pension funds and provident funds are all taxable. This means if you need to access any of these funds at some point, your tax record needs to be recent. And, according to South African law, retirement funds can only be accessed if you’re aged 55 years and older.

 

5. You won’t be on SARS’ radar

Having a complete tax history means you’re less likely to be investigated for not being compliant. You’ll also have less admin to do, because if you currently fall below the tax threshold, you may rise above it later on. If this happens, you’ll need to catch up on filing.

 

Good to know

 

Keep in mind that the 2022 tax return filing period runs from 1 July to 24 October 2022 for individual (non-provisional) taxpayers and 1 July 2022 to 23 January 2023 for provisional taxpayers.

 

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