How to work out your Provisional Tax calculations correctly before 31 August 2014 deadline
Can you believe the Provisional Tax deadline is almost here?
That's right, if you're a Provisional Tax payer, you have until 31 August to submit your first period Provisional Tax info.
That's just 14 days away.
Here's what you need to remember about submitting your Provisional Tax and some helpful steps to calculating it correctly...
*********** Recommended product ************
You'll be paying a tax penalty of up to R4 000 to SARS on 31 August…
If you haven't submitted your Provisional Tax return by 31 August 2014,
then SARS will add a R4 000 penalty to your tax bill…
Errors mean double penalties – one for the error,
and one for not following the rules!
Don't know where to start?
Or how to calculate the tax?
Click here to get your hands on a tell-all guide today!
It'll walk you through every step in the Provisional Tax process,
so you'll never put a foot wrong again!
31 August is a date you must diarise. That's when your first Period Provisional Tax is due.
During this period, you must submit:
Half of your total estimated tax for the full year;
Less the employees tax paid this period(six months);
Less any allowable foreign tax credits for this period(six months);
Here's how to work out how much you owe SARS
How to calculate your Provisional Tax in seven steps
The Provisional Tax 101 E-Report
outlines seven steps you must use to work out your Provisional Tax correctly.
Step #1: Calculate your estimated taxable income for the tax year. This is the most important step.
Step #2: Calculate the amount of tax you'll pay on this taxable income
Step #3: Subtract the annual tax rebate from this. This gives you the total tax
you'll have to pay for the tax year.
Step #4: If it's the 1st provisional tax return you're calculating, then subtract half of the total tax payable for
the year and you're left with an amount due for the first period of the tax year.
Step #5: Subtract any employee's tax deducted for the tax year (only the first six months if you're completing
the first provisional return).
Step #6: Less any allowable foreign tax credits for the tax year (only the first six months if you're completing
the 1st provisional return).
Step #7: Add any outstanding SARS penalties and interest on this amount. This'll already be on your
provisional tax return.
And voila! You've calculated your Provisional Tax!
If you end up with a negative figure, you simply get The Provisional Tax 101 E-Report
to find out what to enter on your IPR6...
Now that you know how to calculate your Provisional Tax! Don't miss the 2014 Provisional Tax deadline on the 31 August.
Note: 5 of 1 vote