Note: this is probably no help to you if you’re not a South African resident dealing with tax. Also, don’t take any of this as registered professional tax advice. Contact an actual registered tax professional.
I don’t like tax. Nobody likes dealing with tax.
Of all the financial concerns surrounding the job, I don’t think there’s anything that terrifies artists more than dealing with tax. What’s not to hate? It’s confusing, hard to understand and can be literally days of admin, our favourite. And if you do it wrong, or refuse to do it, you might go to jail.
If you’re breaking out into stress hives just reading this, allow me to talk you back from the edge.
First off, you won’t go to jail for being late on your taxes or not submitting your returns for a few years. It’s actually ridiculously common for young people to not realise they have to submit personal tax returns on top of the returns their first company submits for them. You have to commit some pretty heinous and intentional fraud to be jailed for tax evasion.
Secondly, tax is really quite straightforward, in a… taxing kind of way. It’s not fun, but it’s not there to trick you. There is plenty you can do to make dealing with tax A LOT EASIER over the tax season. In fact, tax can be a pretty powerful aid to your financial ambitions, if you learn how to use it and make it work for you.
I’m not perfect at dealing with tax, but I do have some tips and shortcuts in prepping that might help, or at least make the process less arduous.
I’ll also be including some quotes from my friend and tax-paladin André Bothma (you can follow him on Twitter @Andre28071990).
1. Get an accountant.
Yes, it’s lazier than doing your own e-filing. Yes, they’ll charge you for things you could, in theory, do yourself for free, like get your own tax clearance certificate.
No, I don’t care. If you’re losing sleep thinking about submitting your returns, tax accountants are worth every cent you pay them. They’re a particularly tenacious breed of human being that likes to ferret out every cent and close every spreadsheet hole they see. I was surprised at how affordable accountants’ services were. Accountants charge you fixed rates per return submitted, once a year. They will often even go through your receipts for you at an hourly rate. More on receipts later.
Tax accountants know all the intricacies of tax law and can get you *literally* thousands back in refunds/rebates/relief. They also LOVE answering questions. The jargon can get pretty thick, but you will get an answer. Ask stupid, super-obvious questions, ask for spreadsheets, ask for lists and coaching on how to capture your information. Just ask.
Tax pros may even be able to help you get registered as a tax-payer. You ought get yourself a tax number the minute you start earning, and definitely when your earnings start to exceed the tax threshold of R78 150.00 per year.
If you’ve only worked for one employer all year and your tax situation couldn’t be simpler, maybe then do your own e-filing. But if you freelance, you’re probably paying provisional tax twice yearly and juggling multiple clients and IRP5s (calm down, I’ll get to all of it). Then tax accountants are as unto therapists for value return.
2. Track it.
Dealing with tax is infinitely more painful entirely left to the last minute than incrementally kept up during the year. I know this because I do it EVERY YEAR.
Log your stuff once a month, or once every three months. Just do it. Have a checklist and complete the checklist throughout the year as often as possible. What should be on that checklist? Here are some ideas:
- Keep a basic excel spreadsheet of your jobs over the tax year (March 1 – Feb29) Include details like your job dates, clients, client contact details, the amounts paid and whether or not PAYE tax was withheld. Here’s a basic downloadable.
- Download your bank statements every 30 or 90 days
- Keep all your Uber/Bolt receipts or update your car log
- What are your online subscriptions? Website, Adobe suite, music or video sites, Etsy? Download those receipts and keep ’em.
- Business-related expenses? (see Deductibles) Keep those receipts.
- Capture physical paper receipts using an app like Tiny Scanner