3 things to keep in mind when planning for tax
Benjamin Franklin hit the nail on the head when he stated that there are only two certain things in life, death and taxes. Basically, taxes are unavoidable. So what can you do to work with this certain reality? Well here is a basic quick guide on 3 things to keep in mind when planning for tax.
First and foremost tax in all forms and formats from personal to business can get very complex, complicated and making sure you are compliant may seem like a nightmare.
It is very good to familiarise yourself with your tax obligations and have at least some idea of what they are.
Also, with a little pre-planning, you can do a few things to plan for tax.
Your vehicle or vehicles are a working asset for you as an individual and as a business. It is very important to make sure that you keep track of your kilometres. Not only for total kilometres per annum, but also each and every business related trip that you make. You will need to declare this information and it can take hours trying to think back through your year and try to pull the information together. Keep a log book or, even better, there are some very good apps that you can download to assist you as you go along. Information is power, so the more you have and the more detail you have on hand the better.
According to the tax legislation, “any reasonable expense incurred to generate business can be used as a tax deductible”. This is great news and it means that you will need to keep track of every expense that you incur to do business. You can then have this proof and detail to submit and claim which will make a massive difference in terms of your tax liability. So what is a reasonable expense? Stationary, Software, IT, even that business dinner to entertain your next big client can be used as a reasonable expense.
3: Corporate Social Investment (CSI), Donations etc.
Supporting a good cause is not only the moral thing to do, it is also very good for you image, BBEEE points, and best of all, it is tax deductible. Again within reason and there are a few regulations that you need to keep in mind. The most important thing to remember is to plan a CSI or donations budget for the year and you need to make sure that you get an 18A receipt from a section 18A approved organisation and that all the requirements on this receipt are there.
At the end of the day taxes are inevitable. The good news is you can plan and work with them rather than try fight them. The best thing you really can do is seek professional help to navigate your way through the tax minefield and they can help you plan and ensure that you are fully compliant. Who really has the time to learn tax law and sit putting information together and all that anyway? Life is just too busy.
If you haven’t started planning for your taxes, the best thing you can do is contact Counteractive for more information and how we can assist you. With us you are not just a number.
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