Tax planning is a simple way of finding numerous legal ways to lower the amount of tax paid during a specific assessment year. There are certain steps that can be taken to achieve this.
Even though there are some well-known ways to save money when you submit your taxes, there are numerous other ways which can be taken into account.
Tax planning tips:
One of the first steps to take into account during the tax planning is that it’s always advisable to ask for help. Finding someone to help if you are uncomfortable with completing a tax return is a great move because not only will it result in you possibly saving on taxes but it also means that you may be able to prevent the chances of making mistakes on your return, which only results in you being charged more money by tax regulators.
Keep your paperwork safe in order to make sure that your tax returns are completed correctly. One of the best ways of ensuring that you file your taxes correctly is that you keep your receipts safe.
If you are a business owner in South Africa, then you can save on tax by spending more money on research and development. You can do this by registering annually with the Department of Science and Technology.
You can also claim a tax deduction on donations to Public Benefit Organisations. So if you support a specific cause that you care about and it has PBO status, you can save on taxes in this way.
The annual threshold for tax-free savings in South Africa is R33 000, so you can benefit from tax-free growth by investing in such an account.
You can donate to a family trust as a way of increasing assets of the trust, while also lowering the tax liability of your personal estate. A trust provides optimal asset protection.
Familiarise yourself with taxation rules regarding foreign accounts.
Tax planning is essential for any individual or organisation.