Hows does being a provisional tax payer work?

xrapidx

xrapidx

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Hows does being a provisional tax payer work?

Just curious, got a letter from my tax guy, and he's just submitted my second provisional tax return for 2009 - sent me an invoice for this, and IT12 final totaling R4,000 (had a invoice for 2008 IT12: Iterim I totaling R700 in December 08) .

Now I know my life isn't R4,000 complicated.

So - I was wondering what sort of forms you need to submit as a provisional tax payer per year, he says this is the second, so how many are there?

Also - if anyone can recommend a good tax guy who doesn't charge a fortune in Cape Town, I'd appreciate it.

Looking at what he usually charges me for - this year will end up about R8,000.
 
**** me. I don't pay more than R400 bucks for my tax stuff!!!

Phone Justin Stohr. Brilliant guy. +27828248271

He's got my back since 2001 and in those years I think i might have paid in around R4000 including his fee's to the tax man. But got out around R30-40k

He knows what he is doing ;)
 
Provisional tax


Any person who falls into the definition of a provisional taxpayer is required to register as a provisional taxpayer within 30 days of the date on which he becomes a provisional taxpayer.

A provisional taxpayer is defined as:

* any person who derives income that is not remuneration
* any director of a private company, if such director or such company is a resident
* any member of a close corporation who is a resident
* any close corporation or private company or
* any person notified by the Commissioner that he is a provisional taxpayer.

Provisional taxpayers are required to make two compulsory provisional tax payments during the year and a third voluntary payment referred to as the topping up payment. The first provisional tax is payable within the first six months of the year. The second provisional tax is payable by no later than the year-end.

The third provisional tax payment (topping up payment) must be made within 7 months from the year end for individuals or companies or close corporations with a February year end, and within 6 months for companies or close corporations with a year end other than February. The provisional payments for any year will be reflected as a credit against the normal tax as finally assessed for the year.

An IRP6 must accompany all provisional tax payments. The IRP6 forms for the first and second provisional tax payments are identical. The IRP6 form for the third voluntary payment differs slightly. Download your IRP6 for a company or close corporation and for an individual, as well as the IRP6(3) for the third provisional tax payment from the SARS website. The latter document applies to both tax entities.

SARS
 
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AcidRaZor said:
**** me. I don't pay more than R400 bucks for my tax stuff!!!

Phone Justin Stohr. Brilliant guy. +27828248271

He's got my back since 2001 and in those years I think i might have paid in around R4000 including his fee's to the tax man. But got out around R30-40k

He knows what he is doing ;)
Click to expand...

Thanks - whats the R4000 fees to the tax man though, and then getting R30-40k? SARS don't charge fee's do they?
 
Stokstert said:
Provisional tax


Any person who falls into the definition of a provisional taxpayer is required to register as a provisional taxpayer within 30 days of the date on which he becomes a provisional taxpayer.

A provisional taxpayer is defined as:

* any person who derives income that is not remuneration
* any director of a private company, if such director or such company is a resident
* any member of a close corporation who is a resident
* any close corporation or private company or
* any person notified by the Commissioner that he is a provisional taxpayer.

Provisional taxpayers are required to make two compulsory provisional tax payments during the year and a third voluntary payment referred to as the topping up payment. The first provisional tax is payable within the first six months of the year. The second provisional tax is payable by no later than the year-end.

The third provisional tax payment (topping up payment) must be made within 7 months from the year end for individuals or companies or close corporations with a February year end, and within 6 months for companies or close corporations with a year end other than February. The provisional payments for any year will be reflected as a credit against the normal tax as finally assessed for the year.

An IRP6 must accompany all provisional tax payments. The IRP6 forms for the first and second provisional tax payments are identical. The IRP6 form for the third voluntary payment differs slightly. Download your IRP6 for a company or close corporation and for an individual, as well as the IRP6(3) for the third provisional tax payment from the SARS website. The latter document applies to both tax entities.

SARS
Click to expand...

My dad was on the board of directors for a private company doing work for the government a while back... and now he got this crappy thing too...
 
Just a note - I've been one since I started working in 2001, but have always paid this guy to do my taxes, so never bothered finding out how it works... but this guys fees seem to be increasing at an alarming rate..

2007 - R1,700
2008 - R2,700
2009 - R4,000 and its only Feb.
 
Stokstert said:
* any person who derives income that is not remuneration
Click to expand...

If the income involved is made up of dividends, interest and rental and the taxable amount does not exceed R20,000, this item does not bring you into the system. See paragraph 18(1)(c) of the Fourth Schedule to the Income Tax Act, 1962.
 
xrapidx said:
Just a note - I've been one since I started working in 2001, but have always paid this guy to do my taxes, so never bothered finding out how it works... but this guys fees seem to be increasing at an alarming rate..

2007 - R1,700
2008 - R2,700
2009 - R4,000 and its only Feb.
Click to expand...
Just as a matter of interest, does he include the tax in the amounts you quote, or must you pay the tax on top of that?
 
xrapidx said:
Thanks - whats the R4000 fees to the tax man though, and then getting R30-40k? SARS don't charge fee's do they?
Click to expand...

Well he usually charges me around R450 every year for everything. And then in 2003 I owed SARS around R1800. The next year I got back R4k, the year after that around R7k etc
 
What's the penalty for not paying your provisional tax for a year? Let's say your taxable income for the whole year is R15000.
 
It won't be something horrible but for you it will still be a lot. For my dad it's something like a R1000 per month if he were to be late.... :eek:
 
BigAl-sa said:
Just as a matter of interest, does he include the tax in the amounts you quote, or must you pay the tax on top of that?
Click to expand...

Just his fee's.

I'm embarrassed to say the amount of tax I pay :(

The thing is, I keep track of EVERYTHING in MS Money - so I just print a report from Mar xx to Feb xx and hand it to him, making his life damn easy.
 
xrapidx said:
Just his fee's.

I'm embarrassed to say the amount of tax I pay :(

The thing is, I keep track of EVERYTHING in MS Money - so I just print a report from Mar xx to Feb xx and hand it to him, making his life damn easy.
Click to expand...
That's heavy - looks like he's working on a percentage of your tax, rather than a per hour rate.

[thinks to self: maybe I should do a BCom specialising in income tax to prepare for a retirement job]

:D
 
That's got to be daylight robbery, considering how much of the work is actually done by you.

On top of that, if you do e-filing, you only really need to fill in two fields: how much income you got and how much tax you have already paid. The rest of the tables are filled in automatically and you even get a field that tells you how much tax you still owe SARS.

Of course, there's a reason why accountants (or tax specialists) have a job - there's a penalty for estimating your taxes wrong. SARS gives you some leeway but if you overestimate the tax you should pay, I hear it's too bad, too sad, SARS will keep your money, thank you very much. And if you pay too little, they will fine you.

My mom works on a temporary basis for a number of companies and I forgot to include the income she derived for the one job she did for the one company over two days (a whole R400 income). SARS fined her R400+ for that mistake on my part.
 
It's pretty easy to do on your own if you don't have a too complicated bookkeeping and accounts system.

You just need to record all your income and expenses and then use the profit as the amount you pay tax on. I'm not sure but I think you need to earn more than R46000 in profit before you pay tax. E-filing helps a lot since everything is calculated automatically. The forms are 2x IRP6 and one IT12 at the end of the year.
 
Sent my tax dude an email saying his fee's have unfortunately gotten too high for the services rendered, and that he should cease all work on my account. :)
 
Quick questing - if I register for eFiling, will it affect my current 2008 return, and will I be able to check on the status my current 2008 return?
 
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