If you want to reduce the amount if income tax you are paying (and who doesn’t), it’s time for some personal tax planning. There’s little you can do legally if you want more ‘cash-in-hand’ other than keep full records of all tax-deductibles. But you can reduce income tax if you invest and ‘spend to save’ – ultimately gaining tax savings along with peace of mind and better long-term financial health.
Ways to reduce your income tax:
Help South Africans with:
- Local Investments: Invest your money in a SA Venture Capital Company. 100% tax deductible in the tax year – with up to a 41% tax relief for individuals and trusts, and 28% tax relief for companies. (Note: Tax will be recouped by SARS if the investment is taken out before the end of a 5-year investment period).
- Donations to Charities: Individuals, trusts and companies can donate up to 10% of their taxable income to SARS registered charities. (Note: Check that the organisation reports all donations received to SARS, or your contribution cannot be claimed as a tax deduction)
Save for a rainy day:
- Tax-free savings Accounts: You can put up to R30 000 into a tax-free savings account. (Note: The lifetime limit for tax free savings per individual is currently R500 000)
Invest in your family’s future:
Family trusts: You can contribute up to R100 000 annually to ‘top up trust capital’.
Personal tax planning with life benefits:
- Retirement, Pension and Provident Funds: Contributions are tax deductible up to 27.5% of your taxable income. Lump sum benefits from Funds are partly tax free (the tax-free portion calculated on a sliding scale. Investment returns are 100% tax free. Reduce income tax and secure your future!
- Medical Aid Contributions: Tax credits are given for contributions. (Note: Private Medical Aids as we know them now is on their way out in South Africa. There may soon be no tax credits awarded for this)
There are certainly some innovative ways to save tax, those listed above a just a few. TAT accountant specialises in tax and is well versed on all the new tax laws. Allow our experience in the tax arena to assist you with saving tax. Fill in our online form and we will give you a call or just call us on 079 285 2687
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