We’re here to share some handy tips on how to save on your taxes in 2024. These insights are inspired by TaxTim’s Tax Health Score tool, which helps
you find deductions and minimize your tax bill. Keep in mind that these tips might not fit everyone, so for personalized advice, consider using a service like TaxTim to file your return.
1. Contribute to a Retirement Fund
Did you know your contributions to retirement funds are tax-deductible? You can deduct up to 27.5% of your taxable income or remuneration, with a cap of R350,000 per year. This includes pension, provident, or retirement annuity (RA) funds. Your employer usually handles pension and provident contributions, but you can add to your RA fund yourself. Plus, you can’t touch your RA funds until you’re 55, making it a smart way to save for retirement and cut down your annual tax bill.
2. Open a Tax-Free Savings Account
A Tax-Free Savings Account (TFSA) is a great way to save. All returns—interest, dividends, and capital gains—are tax-free. You can put in up to R36,000 annually and R500,000 over your lifetime. Spread this across multiple accounts if you want, but don’t exceed the annual limit. Unused annual limits don’t roll over to the next year. And yes, you can open a TFSA for your kids, but remember, their contributions count towards their limits.
3. Donate to a SARS Registered Charity
Giving to a Public Benefit Organization (PBO) is not only generous but also tax-deductible up to 10% of your taxable income. If you donate more than that, the excess can be carried forward to the next tax year. Just make sure to get a Section 18A tax certificate from the PBO. It’s a win-win: support a good cause and pay less tax.
4. Join a Medical Aid Scheme
Joining a medical aid scheme gives you a monthly tax credit: R347 for you, R347 for your first dependent, and R234 for each additional dependent. This credit directly reduces your tax bill. For instance, if you’re covering yourself, your spouse, and three kids, your annual tax credit will be R17,172. However, this credit can’t exceed your actual tax liability.
5. Keep a Logbook for Travel Allowances
If you get a travel allowance, 80% of it is usually taxed (assuming 80% is for personal use and 20% for business). But if you keep a logbook of your business mileage, you can claim a travel deduction and reduce your taxable income. This works if your allowance shows up under source codes 3701 or 3702 on your IRP5.
6. Keep a Logbook for Company Cars
Using a company car is a taxable fringe benefit. However, if you keep a logbook for business mileage, you can claim a travel deduction. This applies if your company car fringe benefit is listed under source codes 3802 or 3816 on your IRP5.
7. Claim Commission-Related Expenses
If more than 50% of your pay is commission (coded 3606 on your IRP5), you can deduct related expenses like telephone bills, stationery, and employee costs. Keep all records and invoices to make sure you can claim these deductions and save on taxes.
8. Claim Business Travel for Commission Earners
As a commission earner, if your commission makes up more than 50% of your total pay, you can deduct business-related travel. Keep a logbook to track your business travel for this deduction.
9. Claim Daily Costs for Subsistence Allowances
If you get a subsistence allowance (codes 3704 for local and 3715 for foreign travel), you can claim either actual expenses (with receipts) or the SARS deemed daily rate. The deemed rate means you don’t need receipts. For 2024, the local rates are R500 for meals and incidentals, and R150 for incidentals only. International rates vary by country.
10. Claim Expenses for Non-Salary Income
If you’re self-employed, you can deduct business-related expenses from your income. Keep detailed records and invoices for expenses like phone bills, stationery, and employee costs to maximize your deductions and reduce your taxable income.
Conclusion
By following these tips, you can optimize your tax returns and possibly boost your refund. For tailored advice, consider using a service like TaxTim to file your return and get your own Tax Health Score. Happy saving!
