So, I’m a Sole Proprietor, when it comes to SARS, what do I do?

Till one day, during studies, things just clicked, and I thought ‘this is not so bad’. I realized that not knowing made us afraid. And not everyone likes balancing books and doing admin and submitting taxes. I get that.

That is why I always say; you do photography, I do taxes. I cannot even do a selfie properly. That is why we both have work. If we all liked the same thing, we would be most boring and most of us out of business.

So, let’s look at how to prepare for tax season.

It is essential, as a sole proprietor, to create an income statement in preparing to submit your taxes – this is your income and expenses of the financial year listed on a spreadsheet. We need to submit our taxes now for the 2020 financial year – meaning, the period March 2019 to February 2020.

Income is always a simple sum to apply. Most of us know what our Sales are and the value of it. So add it up and slot it in.

Now the expenses. This one always seems more tricky. What business expenses did I incur in my business? As a photographer, I might need to hire a venue, get some props. This is called the cost of a sale – a cost incurred to make the sale.

Let’s quickly talk equipment. Some of your equipment can be very expensive. If the value of the equipment is more than R7 000, it will not be a straight expense: there will be depreciation involved. Here you can always ask your accountant to do a quick depreciation formula for you to reduce the value year by year. If the value is below R7 000, it is considered a straight expense.

Expenses include bank charges, accounting fees, marketing & advertising, computer expenses, courier fees, depreciation, entertainment, motor vehicle (Fuel, tolls, repairs & maintenance), office expenses, printing & stationery, rent, R&M, salaries, security, telephone & internet, training, travel & accommodation.

Calculating your Profit (Sales Minus Expenses) SARS will tax you on profit only.

Simple right?

ANNELIZE HARTMAN

Annelize’s experience ranges from being an assistant financial manager, human resources manager, assistant general manager, general manager and business owner. She is a registered tax practitioner and Certified Technical Financial Accountant. She attended the VIP Payroll courses in TAX, Payroll phase 1, 2, & 3 as well as Personnel courses and is also a registered certified Sage One Online Accounting advisor. Annelize’s expertise is on the following – Registration of individuals and businesses for Tax Income, Individual and provisional Tax Returns, Business Tax Returns, SARS – Income Tax, PAYE, SDL and VAT, DoL – UIF and Compensation registration and related assistance, CIPC – Registering and purchasing of Companies, Business Plans, Budget set up, Data Capturing for small businesses, Financial assistance, Accounting Advise, Financial Statements, Payroll and Payslips, Tax Clearances, Tax Directives, Shares and Share certificates, Payroll – Payroll for all small business on a Payroll system, Easyfile, EMP501 Recons, EMP201, Issue IRP5’s. Serenity Accounting Company is taking things to the next level, being part of “A Legacy Of Small Businesses Thinking Big”.

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