The LAST DAY of February is an important time for taxpayers.
This day marks the end of the tax year. It is the last date open to you for reducing your income tax for this year!
And you know just how important any tax deduction is for you!
If you can reduce your gross earnings, you pay less income tax.
It's that simple!
So how do you reduce your income tax?
SARS allows every tax payer to divert a portion of their income tax into a Retirement Annuity.
Instead of losing it to the government, why not save it for your own pension?
It's a gift no one should ignore!
(Why every taxpayer does not have a RA is a mystery to those of us who do!)
Very few retirement funds allow you to inject an additional lump sum amount of cash into the fund in the last days of February - but not an RA!
How does it work?
The tax laws allow you to deduct a portion of your savings into a Retirement Annuity.
There are certain limits - depending upon how you earn your income and if you have a company pension or provident fund already.
BUT, even if you have a company pension fund, you can still benefit from this gift!
How do I get my share?
All you have to do is work out how much you earned (including income like commission, dividends, car allowance and interest) - your Gross Income
Then deduct your exempt amounts like basic interest, dividends and so on. That is your Income.
Now this is the key...you are allowed to deduct certain amounts from your income.
The more you can deduct, the lower your income tax!
SARS has substantially reduced the deductions most salaried persons can use - BUT NOT RA's!
I can assist you, if you need help.
Does this seem too technical?Then consider this.
Say your taxable (non-pensionable) income is R 200,000 per annum.
Your Marginal tax rate is thus 26%.
You can invest R 55,000 per year in a RA fund. (27,5% of your annual taxable earnings) due to the tax exemption of his investment, your actual cost will only be R 40,700
But you are saving R 55,000.
So SARS actually increasing your contribution by almost 35% BEFORE your investment even begins!!
That's the gift I am talking about. You must be crazy not to take it!
And then your investment still has to grow, so imagine what you final return could be!
These tax savings can be substantial and can greatly improve the overall return on your investment!
What if you don't have a lump sum at the end of your tax year to pay in?
Don't let that prevent you from getting your share!
You can always start a monthly contribution to a Retirement Annuity.
Then at the year end you can top it up if you have not used your full deduction.
Either way CONTACT ME IF YOU WANT TO GET WHAT BELONGS TO YOU!
So PLEASE, get your gift - Take out an RA or add a lump sum to an existing RA to bring your contributions up to the maximum amount you are allowed to deduct from your taxable income!
Let me assist you in doing this,
BUT REMEMBER YOU ONLY HAVE UNTIL 29TH FEBRUARY EVERY YEAR, SO ACT TODAY!!
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