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Use these checklists to see if you have the right documents for calculating provisional tax

by , 03 August 2016
Use these checklists to see if you have the right documents for calculating provisional taxAs you know, provisional tax is a tax system that makes taxpayers estimate and pay their taxes in the form of two payments. This will be one payment every six months, instead of having to pay one big amount at the end of the tax year.

But it's important to keep in mind that the documents you require to calculate provisional tax will depend on whether you're a company or individual. In other words, individuals and companies require different documents to calculate their provisional tax.

So to help you ensure that you have the correct documents, whether you're an individual or company, here are the checklists...

Keep reading to see them...

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Use these checklists to see if you have the right documents for calculating provisional tax


CHECKLIST#1: Companies

Companies must have:

1. An income statement, or an extract from your accounting records which indicate profits or losses;

2. Invoices for both income as well as expenses; and

3. If applicable, a list of income items which are not taxable, as well as a list of expense items which are not deductible.

CHECKLIST#2: Individuals

Individuals require more documents than companies. They are:

1. Payslips;

2. Invoices;

3. Proof of your business expenses;

4. Bank account statements (for the last three months at least;

5. Investment statements;

6. Details regarding your medical aid expenses;

7. A list of retirement annuity contributions;

8. A list of donations to section 18(A) charities;

9. A logbook which documents private as well as business travel. Also, any expenses relating to maintenance, fuel, insurance and licensing; and

10. A list detailing all of your capital gains. This is because your capital gain could actually push you over the R1 million mark and into 'tier 2' (Tier 1 provisional taxpayers have a taxable income of less than R1 million, while Tier 2 provisional taxpayers have a taxable income of more than R1 million). 
 
IMPORTNAT NOTE:

In the past, all individuals had to be provisional taxpayers, in which we all made provisional payments during the tax year – based on our estimated taxable income.

But things have changed now, and you can either be a provisional or a non-provisional taxpayer.
 
*To see who is and who isn't a provisional taxpayer, page over to Chapter P 01 in your Practical Tax Loose Leaf Service handbook, or click here to order your copy today.

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