Common Mistakes to Watch For (Tax season survival)
By Michelle Bester CFP®
Staying compliant with SARS is not only about filing your tax return, but also about understanding the rules, avoiding small errors, and keeping your financial affairs in order throughout the year. Many taxpayers only realise they have made a mistake when a penalty notice appears on e-filing. Fortunately, most SARS penalties are completely preventable.
This article outlines the most common pitfalls and offers practical steps to help taxpayers avoid unnecessary penalties and stress.
Missing Tax Deadlines
Late returns are the number one cause of administrative penalties. SARS imposes monthly penalties until the return is submitted, which can become costly over time.
How to avoid it
Track the annual filing deadlines for both normal and provisional taxpayers.
File as early as possible to avoid system delays closer to the deadline.
Set reminders in your digital calendar for filing and provisional tax cycles (August and February).
Not Keeping Personal Information Up to Date
SARS sends important notifications via SMS and email. If your details are outdated, you may miss urgent messages leading to missed deadlines or unresponded audit requests.
How to avoid it
Regularly update your physical address, contact details, and banking information on eFiling.
Ensure your email inbox is active and monitored.
Underestimating Provisional Tax
Provisional taxpayers often miscalculate expected income, resulting in underestimation penalties. SARS compares your estimate with your final taxable income at year‑end.
How to avoid it
Base your estimates on accurate financial records.
If your income fluctuates, use a conservative estimate to reduce the risk of being under.
Consult a tax practitioner to verify calculations.
Failing to Declare All Income
SARS receives third‑party data from employers, banks, investment platforms, insurers, and medical schemes. If your return does not match their data, you may face penalties or audits.
Income that taxpayers often forget to include
Rental income
Interest and dividends
Income from side businesses
Capital gains on investments or property
Foreign income
How to avoid it
Keep a personal income log for the full tax year.
Download all relevant IT3 and IRP5/IRP6 certificates before filing.
Incorrect or Unsupported Deductions
Claiming expenses without proper proof can lead to SARS disallowing the deduction and adding penalties and interest.
Common areas of error
Home‑office claims
Medical expenses not supported by tax certificates
Incorrect travel claims
Disallowed business expenses
How to avoid it
Maintain receipts and records for at least five years.
Ensure travel logbooks and home‑office calculations meet SARS rules.
Ignoring SARS Verification or Audit Requests
If SARS requires additional documents and you fail to respond, they may issue a revised assessment, often resulting in penalties and additional tax liability.
How to avoid it
Check eFiling notifications regularly.
Submit all requested supporting documents within the required timeframe (usually 21–30 days).
Always keep digital copies of your tax documents easily accessible.
Using Incorrect or Unverifiable Banking Details
If SARS cannot pay your refund or debit your account, you may face delays, audits, or verification processes.
How to avoid it
Use a valid South African bank account registered in your name.
Avoid using business bank accounts for personal tax profiles.
Verify your details every year, especially if you have changed banks.
Not Registering for Tax When Required
Many South Africans only realise years later that they should have registered for income tax earlier. Late registration can trigger backdated penalties.
How to avoid it
Register as soon as your income exceeds the SARS filing threshold.
Ensure your employer has your correct tax reference number.
Avoiding SARS penalties is about staying organised, proactive, and informed. With proper record‑keeping, timely filing, and attention to SARS communication, tax compliance becomes simple and stress‑free.
If you are unsure or want support throughout the process, contact Ascor® Independent Wealth Managers. Our team is ready to help you stay compliant and avoid unnecessary penalties.
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