You manage your money and invest using 22seven. But did you know that you can use it to win at taxes too? Here are a few ways to make your 22seven profile tax ready:
Use categories to allocate your income and expenses
Part of the magic of using 22seven is the predefined categories that allocate a purchase from Pick ‘n Pay to ‘Groceries’, or that card swipe at Engen to ‘Fuel and Transport’. These are important for tracking your monthly budget, but could also play a part in your tax return.
Mighty medical expenses
Take medical expenses for example. It’s one of the most claimed tax deductions as many taxpayers have a medical aid benefit from their company. While these contributions attract a monthly tax credit, you’re also allowed to claim certain medical expenses that were paid by you without being reimbursed by medical aid. To make the most of the medical portion of your tax return, simply create custom categories for your medical expenses. For example:
- Medical (Recurring): Monthly medical aid contributions.
- Medical – Claimed: Medical expenses that medical aid paid, or reimbursed you for, in full.
- Medical – Unclaimed: Medical expenses that you paid for out-of-pocket, or only partially settled by medical aid (you’ll need to use the split transaction feature for this particular instance).
Only the amount over and above 7.5% of your annual taxable income will be considered as claimable for medical expenses, so if it’s only one or two doctors’ appointments it’s probably not worth your while to claim.
Hands up, commission earners!
If you earn more than 50% of your annual income in the form of commission you’re allowed to claim all expenses directly related to earning your income. This would, no doubt, include all those tank fills, a fair amount on business lunches, and a portion of what you pay in keeping yourself connected to the interwebs and cell phone towers. If you’ve used custom categories cleverly, you can simply export your transactions to an Excel worksheet or quickly tally up the total amounts to claim by using the advanced search. Then when you need to give details about your expenses to a tax practitioner or SARS, you simply give them these amounts.
Expenses to take note of:
- Interest on car payments.
- Fuel and car maintenance costs (remember to keep a detailed logbook for your mileage too).
- Cell phone contracts / airtime.
- Entertainment expenses (SARS have become sticky with these, so you’ll have to have proof it was a legitimate business expenses that resulted in income and not just a lazy liquid lunch with pals).
Moonlighting / Freelancing / Building an Empire
If you’re part of the growing number of South Africans working two jobs (one full-time for a company and the other building your own aspiring empire on the side) then you can get even smarter by using custom categories to separate out your personal transactions, from those related to your sideline gig.
For example, buying your little Johnny’s school stationery at CNA should be categorised as ‘Stationery – Personal’, whereas paper and printer ink for your freelance gig should be allocated a ‘Stationery – Business’ category. Income earned, or invoices paid from your part-time endeavours should also be split from your “normal” job so you can quickly determine your profit (hooray) or loss (don’t worry, you’ll get there) based on the difference between income and expenses.
What’s your tax season survival tips?