Self employed Tax help

D

devank123

Active Member
Joined
May 20, 2007
Messages
52
Reaction score
0
Hello Friends

I work for myself.I dd my own statement of income and expenses
this year, thanks to some advice I got here.

Just wanted to know do you add your medical aid and pension
deductions in the statement as well .

Thanks
Devan
 
Join the club, I also cannot afford an accountant !

DD
 
I don't think you can deduct your medical aid contributions. Not sure about Pension.
 
Some really good advice, and accountant may cost u short term, but will get you huge refunds long term... Especially if you are self employed!
 
And you can claim for medical aid contributions, above the annual limit. Honestly, it is the only way to go. I am not an accountant, by the way. I Am self employed tho...
 
Hi Devan

Are you a sole trader? Then you should be able to deduct your medical aid and retirement annuity contribtuions, as well as any section 18A donations just like any employed taxpayer.

If you're a CC or a company, it's a separate legal entitity from you, which means you unfortunately can't deduct these permissable contributions in your own name.
 
Grrrr I am not sure about pension fund contributions from the point of view of an owner of a business, but only for an employee.

For medical aid contributions you can read S18 of the Income Tax Act 1962 at http://www.acts.co.za/tax/index.htm. That section is relatively clear about the who have restrictions placed on the amount deductable and how to calculate it.

Just take note that medical deductions takes place very last in calculating the taxable income of an individual.
Here is a picture of one of my class notes regarding the order in which taxable income is calculated (it might not be complete since it is for 2nd year accounting students): http://mybroadband.co.za/photos/showphoto.php?photo=8136&cat=500
 
Barefoot Billionaire said:
Hi Devan

Are you a sole trader? Then you should be able to deduct your medical aid and retirement annuity contribtuions, as well as any section 18A donations just like any employed taxpayer.

If you're a CC or a company, it's a separate legal entitity from you, which means you unfortunately can't deduct these permissable contributions in your own name.
Click to expand...

Hi

Yes I am sole trader.So medical aid and pension should appear in statement of income/expenses as well.

How does one do depreciation on printers/computer equipment. ?

Thanks
Deven
 
devank123 said:
Hi

Yes I am sole trader.So medical aid and pension should appear in statement of income/expenses as well.

How does one do depreciation on printers/computer equipment. ?

Thanks
Deven
Click to expand...

can one claim depreciation on printers ?

DD
 
devank123 said:
Hi

Yes I am sole trader.So medical aid and pension should appear in statement of income/expenses as well.

How does one do depreciation on printers/computer equipment. ?

Thanks
Deven
Click to expand...

Hi there

No, the medical aid contributions and all other deductions are separate from your business info. SARS will have different sections for these on your e-filing form. You basically complete your tax return like you don't have a business at all, eg deduct your personal RAF contributions and medical aid contributions and then when it asks you whether you have a business, you click 'yes' and a whole new section opens up for your business info.

I'm unfortunately not an accountant and not sure over how many years you depreciate your printers and computers. My guess is 3 years, but you'd have to ask one of the accountants on here.

I'm a consultant, and as a concession we're allowed to deduct our laptop purchase all in one year (no depreciation as far as I can pick up). But normal depreciation rules will apply for a business's current assets.
 
devank123 said:
Hi
How does one do depreciation on printers/computer equipment. ?
Deven
Click to expand...
Please do not take any advice given as being authoritative, because I am still just studying this stuff.


There is a wear and tear allowance (section 11(e)) which can be claimed. Take note that his can only be claimed on assets used for trade. It cannot be claimed on the following assets:
*assets used in the process of manufacture
*buildings
*any asset on which a special wear and tear allowance is claimed.

The wear and tear allowance is claimed on a straight line basis over a time period, as per practice note 19 and 39 (these tables of time period for different assets are released by SARS), on the cost of the asset.
The cost of the asset includes customs duty and installation/moving/erection costs. VAT also influences the cost of the asset used for this calculation, but I am unsure as to how precicely.

Items smaller than R5000 can be claimed in full in the year of purchase.
 
Computers, printers, that kind of thing we depreciate over 3 years.

Copiers, fridges, cars - over 5 years

And furniture is either 5 or 10 years, can't remember now, but this is what our accountant uses if I remember correctly.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X