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How bad tax planning can reduce your income

Tax planning is not just for the 1%. If you have alternative sources of income, it is important for tax purposes to structure your income appropriately. Even if you are just a salary earner, you should be aware of how you can plan your tax efficiently. 

If you have never thought about tax planning, you might be missing tax savings.

Here are a few tips to get you started:

1. Submit your tax return

If you have a Travel Allowance/Medical Aid/Personal Retirement Annuity it is important to submit your tax returns. If you have paid more tax than you owe, you can claim a tax refund from SARS. You will only get a refund from SARS if you submit your tax returns. 

2. Consider taking out a Retirement Annuity (RA). 

Only 7% of South Africans can retire comfortably. Even if you are a member of your employer’s pension fund, it is worth considering taking out a Retirement Annuity. Not only will you be in a better position at retirement, but your contribution will also be deductible for tax purposes. This will decrease your tax liability and potentially result in a tax refund. 

3. Take out a medical aid membership. 

You will receive medical tax credits that will be deducted from your tax payable. Start with a basic hospital plan to cover your risk of unexpected hospitalization. Momentum Health just launched a new medical aid option specifically for young individuals. Discovery has also implemented its Smart plan in 2016 where the improve efficiency through technology and thereby reduce premiums. 

How to get started with your tax planning:

1. Contact an Independent Financial Adviser

Our independent financial advisers at TVC Wealth and Health Managers can advise on your financial needs – including Medical Aids & Retirement Annuities. 

We also have 20+ years of experience where we have helped individuals and businesses with their tax planning. 

2. Get help with your tax submissions

Our Financial Advises have started a new company, to submit tax returns for individual taxpayers. They use technology to operate efficiently, which allows them to offer affordable prices. 

  • Non-Provisional Taxpayers: R 400
  • Provisional Taxpayer: R 800

Do you still have your 2019 new year’s resolutions?

Let’s help you check off those financial goals. 

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