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With the many challenges small business owners face on a daily basis, trying to understand the complexities of the tax returns process can be draining. Filing your tax return is probably something you don’t look forward to. Research conducted by TaxTim, an online portal that can help you complete your tax return correctly, indicated that 58% of small businesses do not get professional help when submitting their annual tax returns.
Figuring out how much you owe and when to submit your tax return does not have to be a pain, especially with so many free online tax tools at your disposal. Here are a few tax tips for SMEs to help you file your tax return with confidence.
Don’t lose your slips
All your documents relating to income and expenses, such as invoices and receipts, should be kept and filed in a logical order. This way you can avoid having to go through the struggle of searching for slips from the previous year, should SARS ask for verification on your business’s tax return. If you have filed logically, all slips will be within your reach.
Take note of the allowed deductions
There are several deductions and allowances available to SMEs. Ensure that you familiarise yourself with them to avoid paying more tax for your business than necessary. You could, for instance, be able to claim an allowance for a building that your business owns, or special tax deductions for leased assets.
Keep important documents for a minimum of five years
Take care not to throw away your documents after you’ve filed your business tax return. SMEs are required to keep all relevant documents for a minimum of five years by legislation. SARS may need to evaluate your previous tax returns and you don’t want to be without essential documents that impact your business’s tax liability.
How to file your tax return
You can file your tax return in several ways:
- You can send it to SARS by post.
- You can go to your nearest SARS branch with the documentation listed for assistance.
- There is the option of submitting your taxes online through the SARS efiling system.
- You can hire an accountant to do your business’s tax return for you.
There are also other online services, such as TaxTim, that offer online support in the process of filing your return - have a look at ‘Online tax tools to make your returns a breeze this season’ where SME Toolkit South Africa was also featured.
Remember that there are different deadlines for the different methods of filing your tax return, so make sure you visit the SARS website to ensure you don’t miss any deadlines, and to avoid penalties.
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