List of Income and Expenses for Individuals
Below is a comprehensive list of possible sources of income, possible deductions, and allowances available for individual/personal income tax returns – we know it’s a lot to read through! If you feel uncertain about any items on this list or have questions, please feel free to get in contact with us so that we can schedule a call and assist you.
Income tax return for the year, periods covered are 1 March until 28 February:
1. Banking details
a. Without accurate banking details SARS is unable to issue a refund
b. Bank Confirmation letter
2. If married
Are you married in community of property or out of community of property?
Income source documents
1. IRP5’s from all employers where you were an employee (deductions available for travel allowances received if you have a logbook)
2. Investment Income (local/foreign interest income and dividends)
a. IT3B’s certificates
b. If you are married in community of property, the certificates received by both you (the taxpayer) and your spouse are required
c. Tax Free Investment Certificates
d. Venture Capital Company Investments accompanied by a VCC certificate
3. All information relating to the letting of assets if income was derived therefrom (e.g. rental income from property)
4. Local Business, Trade and professional Income (more for business income that has not been taxed elsewhere on an IRP5 like a freelancer or independent contractor
5. Partnerships/Sole Proprietors – Income and expenses should be detailed schedules or a proper set of management accounts with supporting documents
6. Any and all foreign income or assets to be listed and detailed a bit for better understanding of the nature and source of the income or investments
Expenses, allowances or other deductions available
7. Medical scheme fees and qualifying medical expenses
a. Medical scheme statement (indicating your portion paid on contributions, number of beneficiaries, total claims not refunded)
b. A list of qualifying medical expenses (retain proof of payment) not recovered from medical scheme
8. Retirement Annuity
a. IT3(f) certificate from institution where contributions were made
9. Travel Allowance
a. Need a logbook of actual kms travelled if travel allowance or use of company car fringe benefit has been assigned to yourself
b. Keep in mind that business travel was restricted for a few weeks in 2020 due to COVID-19 and that travel after those weeks were also limited, make sure that travel logbooks include these quiet periods
10. All information relating to capital gain transactions (local and foreign)
a. IT3C’s Capital Gain/Loss Certificates from financial instruments which are listed/unlisted, immovable property, cryptocurrencies
b. Disposal of Assets which attracts capital gains (for example the sale of a primary residence)
11. Commission worker expenses if income is earned under code 3606
a. Code 3606 applies to employees who earn more than 50% of their total remuneration as commission income
12. Donations to PBO’s
a. Section 18A certificates for all qualifying donations made to Public Benefit Organizations
13. Home office expenses
a. Premises needs to be either owned in your personal name or leased in your personal name
b. A letter from your employer permitting remote work – including the period that remote work was allowed and where available dates that the employee did not report to the office.
c. Floor plan showing dedicated space and calculation of proportion in relation to total buildings on the property.
d. Photographs showing a dedicated space that is specifically equipped.
e. A detailed schedule showing a calculation that work was mainly from home – in other words, showing that more than 50% of all work for the year was from the home office, including any supporting evidence.
f. Actual invoices of claimed expenses with proof of payment, these must be in the name of the taxpayer:
I. Internet
II. Electricity
III. Interest for bond
IV. Repairs and maintenance
V. Other costs
g. Schedule of amounts claimed and apportionment calculations
14. All information relating to the letting of assets if income was derived therefrom (e.g. rental income from property)
a. Bond statements to expense the interest portion
b. Repairs and maintenance schedule and supporting documents
c. Any other costs covered that might be deductible as long as we have proof or supporting documents
15. For all shareholder/director (sometimes the director and shareholder is the same person), SARS requests a list of all local and foreign assets and liabilities. The list needs to be detailed as much as possible.
16. Partnerships/Sole Proprietors
a. Income and expenses – this should be detailed schedules or a proper set of management accounts with supporting documents
17. Local Business, Trade, and Professional Income (more for business income that has not been taxed elsewhere on an IRP5 like a freelancer or independent contractor
18. Foreign transactions
a. Any info relating to foreign income, for example foreign property rentals, royalties, farming
b. Foreign taxes paid and rebates
c. Employment in a foreign country
d. Foreign pensions and dividends, inheritances
19. S12J Venture Capital Investments
a. S12J Tax certificate