Essential Considerations for Tax Practitioners During Tax Filing Season
Tax filing season is a critical time for tax practitioners, often marked by significant challenges. This year, updates to the ITR12 format and issues with e-filing added to these frustrations. Although the filing season officially opened on 1 July, tax practitioners were unable to file returns due to the processing of auto-assessments. It wasn’t until Monday, 15 July, that filing for non-auto-assessed taxpayers was possible. However, the system struggled to handle the high volume of users accessing it simultaneously, resulting in several system crashes and periods of unavailability.
The filing season remains an important period in a tax practitioner’s life. It’s a time when attention to detail, efficient processes, and clear communication are paramount. Below are the key areas Tax Practitioners should focus on to ensure a smooth and successful tax filing season:
1. Stay Updated on Tax Laws and Regulations
Tax laws and regulations are constantly evolving. It’s crucial to stay informed about the latest changes, including new tax credits, deductions, and filing requirements. Regularly review updates from South African Revenue Services (SARS) and other relevant authorities to ensure compliance and provide accurate advice to clients.
In addition to the typical documentation above, SARS has also noted some changes specifically for 2024.
There is now a pro-rata deduction in respect of contributions to Retirement Funds, meaning if any person’s year of assessment is less than 12 months, the allowable retirement contribution deduction (currently R350,000) will be applied proportionally.
There is a similar deduction for tax-free savings: if any person’s year of assessment is less than 12 months, the applicable contribution limitation (currently R36,000) will also be applied proportionally.
The rooftop solar tax credit that was in effect between 1 March 2023 to 29 February 2024 is also applicable to this tax year – so any individual (not applicable to a deceased estate) who took advantage of that can claim back 25% of the cost of the solar PV panels up to a maximum of R15,000.
2. Organise Client Information Early
Start gathering and organising client information well before tax season begins. Create a checklist of required documents and any other relevant financial statements. Encourage clients to submit their documents as early as possible to avoid last-minute rushes.
3. Use Reliable Tax Software
Invest in reliable and up-to-date tax software that can handle complex tax scenarios and streamline the filing process. Good software can help you identify potential errors, optimize tax savings for your clients, and ensure that all forms are completed accurately.
4. Manage Your Time Effectively
Time management is crucial during tax season. Develop a schedule that allocates sufficient time for each client, including time for reviewing and double-checking returns. Use tools like calendars and task management apps to keep track of deadlines and appointments.
5. Communicate Clearly and Frequently
Maintain clear and frequent communication with your clients throughout the tax season. Inform them about deadlines, required documents, and any changes in tax laws that may affect them. Promptly respond to any questions or concerns they may have to prevent misunderstandings and ensure a smooth filing process.
6. Review and Double-Check Returns
Accuracy is critical in tax filing. Carefully review and double-check all tax returns for errors or omissions before submitting them. Even small mistakes can lead to delays, penalties, or audits. Use checklists and verification steps to ensure completeness and correctness.
7. Stay Organised
Keep client files and tax documents organized both digitally and physically. Create a systematic filing system for easy retrieval and reference. This organization will help you work more efficiently and quickly respond to client inquiries.
8. Offer Tax Planning Advice
Tax season is not just about filing returns; it’s also an opportunity to provide valuable tax planning advice. Identify strategies to minimize your clients’ tax liabilities for the upcoming year. Discuss retirement contributions, investment options, and other tax-saving opportunities to help clients plan ahead.
9. Maintain Professionalism Under Pressure
Tax season can be stressful, but maintaining a high level of professionalism is essential. Stay calm and patient, even during the busiest times. Professionalism builds client trust and helps you navigate the season more effectively.
10. Prepare for Potential Audits
While audits are not common, it’s important to prepare for the possibility. Keep detailed records of all filed returns and supporting documents. Ensure that you can quickly provide any necessary documentation if an audit arises.
11. Take Care of Your Well-Being
Finally, don’t forget to take care of your own well-being. Tax season can be demanding, so prioritize self-care, manage stress, and ensure you get adequate rest. A healthy and focused mind is crucial for delivering the best service to your clients.
Conclusion
Tax filing season is a demanding but rewarding time for Tax Practitioners. By staying organised, communicating effectively, and maintaining a high level of professionalism, you can ensure a successful season for both you and your clients. Attention to detail and proactive planning will help you navigate the complexities of tax season with a lot more ease and piece of mind.
Keep yourself up to date by enrolling to CIBA’s Accountant-In-Practice Plus Tax CPD Sub 2024
By enrolling in the Accountant-in-Practice plus Tax series, you will enhance your professional capabilities significantly. This course provides monthly webinars on a range of topics including ethics, financial reporting, audit and assurance, law, technology, and tax. Here’s what you’ll gain:
Up-to-date knowledge on legislative changes affecting your business, practice, and clients.
Skills to prepare compliant financial statements quickly and reliably.
Understanding of the laws and regulations governing your profession.
Ability to efficiently calculate and submit tax returns, along with performing tax advisory services.
Insights into conducting business valuations.
Development of advanced business advisory skills.
This comprehensive subscription is designed to equip CIBA Licensed Tax Practitioners with the essential skills to excel as registered SARS tax professionals, offering immediate and continuous access to the latest in professional development and technical content.