Tax tips 2016


Tax Tips for individuals 2016

With the 2016 income tax season officially open, we receive a lot of queries relating to what can be claimed on an individual’s tax return. In order to assist clients to maximize their tax deductible expenses we have compiled a summary of the expenses that clients can claim:
Retirement annuity and pension contributions
 Medical aid contributions and expenses
 Donations to registered public benefit organisations (Section 18A)
 Travel expenses for business purposes
 Entertainment expenses (commission earners only)
 Home office expenses (commission earners only)
 Wear & Tear (depreciation) on capital assets used for work (commission earners only)
When a taxpayer received a travel allowance or if a taxpayer was reimbursed for business travel at a rate/km, they can claim against this on assessment. We often find that clients only claim if they received a fixed monthly travel allowance and not when they were reimbursed for actual business travel. In order for a taxpayer to claim the travel expenses, they need to keep an accurate logbook of all business travel. The information that the logbook should contain includes the odometer readings for the vehicle used, the client visited and reason for the travel.
Commission earners need to keep a record of actual expenditure incurred on the vehicle used as well as a logbook in order to claim a deduction.
Take note that travel to and from your regular place of work is not considered business travel and cannot be claimed as a deduction.
If a taxpayer’s income consists mainly of commission, they can claim expenditure in respect of a home office, provided that they have a space that is equipped as a home office and used exclusively for this purpose. Certain costs such as rent will have to be apportioned according to the percentage of floor space of the office area in relation to the entire property.
Where a taxpayer incurs the costs for a medical aid on behalf of a family member such as a parent for example, they can claim the tax credits even though the membership is not registered in their name. The taxpayer must be able to prove that they actually paid the contributions and provide a reason why they paid the contributions on behalf of the family member in order to qualify for the tax credit.

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