Tax Question Regarding Contract Work while having a permanent Job

D

DoubleT

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Hi Guys,

First off I'm utterly clueless of this matter, lol. At my permanent Job I get tax deducted from my salary each month etc.

Recently I started some contract work, Its been the last 2 months approx and am about to invoice these guys next month (Friends of mine), So now my question is, How does this work? I know I have to keep lets say 25% of the amount aside for tax purposes etc. Its worth noting this contracting work is quite a lot less than my salary. I'll likely invoice for certain phase completions etc.

But how will this affect my tax filing and such? Seen some comments about independent contracting etc, Do I have to become one of these somehow or?

Thanks Guys :D
 
Back when I did this I just filled in the additional income section.

It does put you on some sort of watch list and if you don't claim additional income in future years you will be audited so expect that for whatever it is worth.
 
Kilgore_Trout_Redux said:
Back when I did this I just filled in the additional income section.

It does put you on some sort of watch list and if you don't claim additional income in future years you will be audited so expect that for whatever it is worth.
Click to expand...

Hmm okay, So now if I put additional income in each year (lets say its super variable). Is this dangerous? lol Auditing always sounds bad :P Assume if i Keep correct invoices and such it'll be fine?
 
DoubleT said:
Hmm okay, So now if I put additional income in each year (lets say its super variable). Is this dangerous? lol Auditing always sounds bad :P Assume if i Keep correct invoices and such it'll be fine?
Click to expand...

Yeah, just claim the additional income when you can. Mine was a once-off but if you see yourself doing a lot of this sort of thing you might be able to get tax breaks registering a company since you can claim expenses.

Always keep your invoices.
 
I did this for the first two years after leaving my previous company (still helped them out a bit). When you complete your tax return next year, you'll simply have to add this additional income in the appropriate section. It will most likely just reduce your payout if you were to get one, or you'll need to pay in an additional amount to SARS, depending on how the math works out.
It is very important that you keep copies of the invoices you issue for at least 5 years though, iirc.

It's not guaranteed that you'll get audited though. This year was the first in 3 years that I did not claim additional income (as I did no additional contract work in the previous tax year), and I was not audited.

I was audited a few years ago though, seemingly random as I had no funny business on my return. If this does happen, simply send in any requested paperwork. Worst case you'll have to wait a few extra weeks for your payout. It really isn't a big deal at all, unless you're hiding something. ;)
 
DoubleT said:
Hi Guys,

First off I'm utterly clueless of this matter, lol. At my permanent Job I get tax deducted from my salary each month etc.

Recently I started some contract work, Its been the last 2 months approx and am about to invoice these guys next month (Friends of mine), So now my question is, How does this work? I know I have to keep lets say 25% of the amount aside for tax purposes etc. Its worth noting this contracting work is quite a lot less than my salary. I'll likely invoice for certain phase completions etc.

But how will this affect my tax filing and such? Seen some comments about independent contracting etc, Do I have to become one of these somehow or?

Thanks Guys :D
Click to expand...

Don't charge them VAT.

That way they don't need to submit it and SARS will be none the wiser.
 
Thanks for the replies guys.

Pienats said:
I did this for the first two years after leaving my previous company (still helped them out a bit). When you complete your tax return next year, you'll simply have to add this additional income in the appropriate section. It will most likely just reduce your payout if you were to get one, or you'll need to pay in an additional amount to SARS, depending on how the math works out.
It is very important that you keep copies of the invoices you issue for at least 5 years though, iirc.

It's not guaranteed that you'll get audited though. This year was the first in 3 years that I did not claim additional income (as I did no additional contract work in the previous tax year), and I was not audited.

I was audited a few years ago though, seemingly random as I had no funny business on my return. If this does happen, simply send in any requested paperwork. Worst case you'll have to wait a few extra weeks for your payout. It really isn't a big deal at all, unless you're hiding something. ;)
Click to expand...

Is there a limit to the additional income? Read some places of R20 000, if its above that you have to register as a provisional tax payer? Lets say for the year I earn an additional R30k from side work?

EDIT: Pretty sure since it exceeds it, i'd have to register for provisional tax. Then pay twice a year on my "predictions", then add this under additional income under business?
 
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