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Attention salary earners! Section 23 (m) of the ITA allows you to claim these four deductions

by , 29 January 2014
Section 23 (m) of the Income Tax Act (ITA) says that if you're a salary earner, or your earnings don't mainly come in the form of commission based on your personal sales, you can claim the following four deductions...

Section 23 (m) of the Income Tax Act affects you as a salary earner. But don't worry; it affects you in a good way.

In terms of the Act, you're allowed to claim the following deductions:

Section 23 (m) of the ITA: Four deductions you're allowed to claim as a salary earner

The Practical Tax Loose Leaf Service outlines the four deductions you're allowed to claim as a salary earner in terms of Section 23 (m) of the ITA.

#1: Pension or retirement annuity contributions that have been deducted from your salary.

#2: Legal expenses incurred for any action, claim, and dispute in the course of carrying on your employment. The exception is that these expenses mustn't be of a capital nature.

If you institute legal proceedings against your employer or former employer for your salary or another benefit not paid, for instance, this won't be considered capital in nature.

If the legal action relates to the protection of your employment, such as unfair dismissal, the legal expenses will not be tax deductible because this action is capital in nature.

#3: Wear-and-tear or depreciation allowances on the assets you use for business purposes, such as a personal computer or cell phone.

#4: Any business-related debt that may have become bad in the year provided that the amount was previously included in your income.

For example, if you're a commission-earning financial advisor and some of your commission was clawed back because of a lapsed insurance policy you sold, you can claim the claw back as a deduction.

Well there you have it. Look out for part two of this article. We'll give you nine more deductions you're allowed to claim as a salary earner.

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