Income Tax

[wizardofid]

Hi guys a hint in the right direction would be helpful.

Generally the last couple of years generally earnings was less the taxable threshold.So never really had to concern my self with income tax. Say hypothetically I am going to get substantial royalties soon, but as the year proceeds these royalties will taper off eventually to a trickle, possibly to a point where with normal commission ends up below taxable thresholds.

Hypothetical of royalties 450K to 750K for the year, with at least 80-100K expected in the first month. Hypothetically how screwed am I ?

 

[SauRoNZA]

Income tax is based on a cumulative annual total.

Doesn't matter when it tapers off if the total for the tax year hits the threshold.

 

[wizardofid]

Income tax is based on a cumulative annual total.

Doesn't matter when it tapers off if the total for the tax year hits the threshold.

Lol so I am hypothetically screwed. Ouch Considering I work freelance how would I go about that....it's all greek to me, to say the least, previously my company I worked for did every thing. Definitely don't want to be left with a nasty surprise of being short.

 

[riscbroker]

It sounds like you'll be classed as a provisional taxpayer, but I could be wrong. There is a lot of info on the SARS site, also a very useful site called Tax Tim that has plenty good advice:

https://www.taxtim.com/za/tax-guides/what-is-provisional-tax-how-and-when

 

[SauRoNZA]

Lol so I am hypothetically screwed. Ouch Considering I work freelance how would I go about that....it's all greek to me, to say the least, previously my company I worked for did every thing. Definitely don't want to be left with a nasty surprise of being short.

I think you should then get hold of a tax practitioner to get it sorted for you at least once.

 

[wizardofid]

It sounds like you'll be classed as a provisional taxpayer, but I could be wrong. There is a lot of info on the SARS site, also a very useful site called Tax Tim that has plenty good advice:

https://www.taxtim.com/za/tax-guides/what-is-provisional-tax-how-and-when

Yeah I got that link earlier thanks, will have to go with 2 payments a year as I don't have the foggiest as to what the annual income, will be.The main problem is royalties are from a preexisting user base.I have only taken potential royalties from 0.75% to calculate roughly how much I should be putting away for tax payments as I said it tappers off eventually.

Best way to deal with that money for tax payments, but it in a interests earning account until such time for payment. ?

I think you should then get hold of a tax practitioner to get it sorted for you at least once.

Will likely have to do that Eventually