[Question] Advice on personal/provisional tax?

[Parkhere]

Is it appropriate to ask for advice on personal/provisional tax on this forum?

As a salaried employee for many years, I have always done my own tax, there is not much one can do to avoid paying tax on salary.

Nearing retirement with Capital Gains on investments, and rental income, my tax situation is getting more complex.

I still do my own tax returns, eFiling makes it very easy, but I am becoming aware that I may need to run it past an expert.

Would appreciate input on whether one could ask questions here.

For instance:

Best way to manage tax free lump sum withdrawal?
With a pension and RA, which one should be drawn down first?
Any tips on how to manage tax on rental income (apart from claiming all the obvious expenses)?
Are there any good books that can be purchased?

The above are very general questions, I could get a lot more specific, just thought I would first find out if there are any tax experts out there in TFSA world

[Parkhere]

Any tax experts out there?

[dellatjie]

@Parkhere, there are just too many variables to advise you in general. Best would be to consult with an expert.

[Parkhere]

It appears that finding good tax advice is not that easy, I was hoping there would be some experts lurking in the tax forum.
Possibly my question was too general.

I have been looking around in other areas, Google is usually a good place to start.

Results so far indicate that companies and individuals in the tax area fall into several categories

Tax consultants – Jerry Botha’s name appears very frequently in this respect, and his web site taxconsulting.co.za
Tax practitioners – by law they have to be registered to be able to charge for tax services and submit tax returns.
Accountants and bookkeepers – the business of keeping track of revenue and expenses usually involves managing tax as well.

I have located an accounting business in my area that looks promising, and may suit my current requirement for an annual tax checkup, prior to submission of tax return, rather than a complete handover (that may come later)

Ironically, although I looked at their web site, I found them initially through a 2 line advert they placed in the newspaper classifieds

[Dave A]

I have located an accounting business in my area that looks promising, and may suit my current requirement for an annual tax checkup, prior to submission of tax return, rather than a complete handover (that may come later)

The heads-up I'd give on that is make sure whomever you are using is aware of your medium term objectives/expectations. Often it isn't an issue, but at times it is. (And you seem to be approaching one of those times).

[Parkhere]

Thanks for the advice Dave!

I drafted an email to the local contact and went to some effort to describe my current situation and what I was looking for.
My current situation
...........
What I am thinking of:Annual or biannual visit to one of your experts, armed with my EFiling details and printouts of saved return (ITR12/IRP6), sample of some of my documentation eg Levy statements, Utility, Bond and Maintenance invoices
You look over it and comment if required, charge me your consulting fee for time and effort, and I submit the return to SARS

Received a very helpful email in reply from the company (XXX XXX & Associates Professional Accountants & Tax Practitioners)

Will be meeting next week.

Feedback later

[Parkhere]

Feedback

I met for 1 hour with the partner

I showed him my spreadsheets, supporting documentation, and asked a few questions.

What I learnt

SARS is tightening up on audits, an audit should not come as a surprise, one has to expect it to happen.

Documentation is important, it can be an invoice, a proof of payment, scan or even photos of documents can be sent to SARS

Capital gains tax on share sales is tricky if one has not kept the shares for more than 3 years, as then the gain may be considered as income, which means more tax is paid

Trusts can be useful as a way to avoid paying estate and capital gains tax, as the beneficiaries often pay less tax, and the administration of a trust can be minimised. Of course it is important that the trust is truly independent, if it is the ‘alter ego’ of the founder, then the tax benefits of the trust may turn out to be non existent.

When paying provisional tax, the first payment just has to be reasonable, income estimate the same as the previous year is fine. The second payment has to be more accurate.

When submitting the ITR12 return, the assessment is immediate, so if one has to pay in, the funds need to be available, SARS will not allow payment plans.

Tax practitioners do not have any special relationships or contacts at SARS, so do not expect them to be able to achieve anything special, just because tax is their business and they deal with SARS often. SARS discourages relationships with their staff for obvious reasons.

Overall, my first experience with a tax consultant was positive, I will do it again,.

I consider it to be a worthwhile annual exercise, the financial and tax equivalent of a medical checkup, as circumstances and regulations do change, and ignorance is no excuse (also can be expensive)

[dellatjie]

Just on the payment date: I have come to notice that personal income tax assessments are all due on 2016/01/31, not the end of the next month as in the past.