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This is what you need to know ahead of Tax Season

The word ‘tax’ stirs up many emotions, so we’ve roped in Tax Specialist, Natasha Lorde to answer your questions, and help get you ready for Tax Season.

If you’ve been reluctant to file your tax return because you’re low-key wondering why you’re paying tax in the first place, Natasha Lorde – the founder of Lorde Business Solutions and Tax Now Now, a tax tech company that helps individuals, businesses and trusts understand their taxes in under 10 minutes – explains that it’s not for altruistic reasons “such as viewing taxes as the fuel that powers our beautiful nation, or acknowledging that they fund the schools our children attend, the roads we drive on, and the hospitals we depend upon – and our role in contributing to South Africa’s growth story, then certainly for selfish ones (a win is a win!).”

Natasha, whose heart is set on helping folks create a better relationship with their taxes and finances through tailored solutions that fit everyone’s dreams and goals, further explains that everything we build and purchase is jeopardized when we’re not tax-compliant. “SARS lays claim to both our humble possessions and our luxuries, and everything in between. If we’re truly invested in our growth, we must be keenly aware of what’s required to protect and sustain it.”

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Glamour: Who should pay tax?

Natasha Lorde: The answer differs depending on how you’re filing. For all the individuals out there (in 2024): If you’re under 65, you get a break up to R95 750. For those aged 65 and older, it’s even better at R148 217. And if you’re 75 or above? R165 689.

Now, for the businesses:

SARS has some fantastic tax schemes! If your business qualifies, you could end up paying R0 in taxes. If you did a double take at that sentence, I understand but you did read that right! For example, Small Business Corporations, if your taxes fall between 1 April 2023 and 31 March 2024, you only start paying taxes if your profit (income minus expenses) exceeds R95 750. Imagine having an income of up to R20 million, and if your expenses are just right, bringing your profit to R95 750, you’d pay R0 in tax! In contrast, an individual making R20 million income would be looking at R8 826 839 tax payable (using 2024’s rates). And there’s more! For the small businesses or sole traders (like freelancers) who earn less than R1 million a year, there’s the Turnover Tax. If your yearly income is under R335 000, you’re in the clear with no tax. However, if a business or sole trader doesn’t fit into the above categories, there’s a flat rate of 27% on profits. Think of it as giving away 27 cents for every R1 of profit (right from the first Rand).

And for the Trusts out there:

Trusts have a rate of 45% on their total profit, which is the income after taking away all those qualifying expenses.

A little heads-up:

It’s super important to wrap your head around all of this to sidestep any unexpected hiccups. These tax perks are only up for grabs if you meet the criteria. And remember, even if you didn’t make a penny this year, you’ve still got to file those (R0) tax returns to steer clear of any penalties or interest.

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Glamour: How often should we submit our tax returns and why?

NL: Individuals who don’t earn a rental income, additional income like a side hustle or interest income of more that R30 000 per year submit once during tax season. If individuals do earn a rental income, additional income like a side hustle or interest income of more that R30 000 per year they submit three times a year. Businesses submit according to their financial year-end three times a year. Trusts also submit three times a year.

Glamour: Let’s talk about penalties?

NL: Oh, penalties can be scary! And for good reason, penalties can be charged at up to 150% of the total debt. Imagine being slapped with a penalty and/or interest because you didn’t know about your taxes or because you missed a deadline. And if you’re consistently playing truant, things can get legal. It’s not just about the money; think about your reputation.

Glamour: Is there a way around this?

NL: A big hack is being in the know and taking proactive steps toward understanding your taxes because they’re not going anywhere. This is a real game-changer. This is why I created It’s a breeze to navigate, and it helps you understand your taxes in 10 minutes. It’s also totally okay if taxes have you scratching your head and make you dizzy with anxiety – that is a normal response to something unfamiliar and scary but, don’t be shy to ask for help. Imagine a kiddo trying to sweep up broken glass with a toothbrush because it sort of looks like a broom. Cute, but not very effective, right? It’s all about using the right tools for the job.

Glamour: For those of us who aren’t that clued-up about numbers, would you recommend hiring a new accountant/tax practitioner?

NL: No judgment here! But yes, if numbers give you the jitters, get a pro on board. They’ll save you time, potential money, and a lot of stress. If you have no idea how eFiling works or the answers to the three questions above then you need to get a Tax Advisor/Practitioner on board! We’ve saved our clients close to R200 million in taxes and even more in refunds from over- payment to SARS. More than knowing the numbers or how to complete an e-filing tax form, it’s having the information and experience in creating personalised sound legal tax strategies.

Glamour: What are the benefits of hiring a tax practitioner vs submitting your returns in your own capacity?

NL: Think of it this way: would you cut your own hair before a big event? A tax practitioner knows the ins and outs, the potential pitfalls, and can give you advice tailored just for you. I mean, I have seven accounting firms and we deal with thousands of clients a year. DIY might save a few bucks now, but a mistake can cost a lot more, later. I’ve had clients pay more in tax than they have to me because they have done it themselves.

Glamour: Anything else we should know?

NL: Stay in the loop with tax laws. They change every year – that is why I quote the years when quoting the rates – and ‘I didn’t know’ won’t cut it. If you really want to be ahead of the game, tax planning is the way to go. It’s all about smart, legal strategies to minimize what you owe. And you should definitely know me, if you don’t by now! I share a bunch of free and helpful tax videos; not to answer your tax questions (because tax is very personalised), but to help you ask better ones.

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