The 2021 Filing Season for Individuals and Trusts will open on 1 July 2021. Here’s some important information and notes around retirement contributions.
If an individual contributed to a retirement vehicle: – and did not receive the tax benefit during the year, the individual is within his/her rights to claim the deduction when doing their tax return; – confirmation of their contributions will ordinarily be sent via the retirement company they have contracted with, and this information should also have been received electronically by SARS; – this saving could be quite significant, and as such must be checked before submitting a tax return.
Another item to note regarding retirement fund contributions: – if the individual took a voluntary (or even an involuntary!) pay cut, and did not adjust their contribution amount (i.e. if they were paying the maximum allowed) this would cause them to have had an excessive tax benefit and this will come out in the wash when SARS does the end of year assessment, which will result in the individual having to pay in some additional tax (i.e. pay back the benefit received). Take note and try and avoid any nasty surprises.