🧵THREAD🧵

How to deregister a company with both CIPC and SARS.

Expected timeline (from beginning to end):
4 - 12 months Step 1: Add the company to eFiling. The majority of companies registered with CIPC is not registered on SARS eFiling.

Before I make my YT tutorial on dormant company returns, please follow the steps in this thread carefully.

1. Get the COR 14.3
2. Check tax number
3. Check eFiling
4. Submit dormant tax returns as per video
5. Activate representative if step 3 & 4 fails Step 1 - Get the COR14.3:

The COR 14.3 of the company in question can be downloaded from CIPC website, or should be in your welcome pack email from CIPC.

🧵Thread🧵

Taxable income is the 2nd essential concept to grasp in taxation - the first one being - Gross Income.

What makes Taxable Income so special?

The lower your taxable income, the less tax you pay.
The higher your taxable income, the more tax you pay.

Boom! Because Taxable Income is the thing that determines your tax liability, people try in whatever manner available in the Income Tax Act, and pay stupid amounts in consulting and accounting fees to drive this value as low as legally possible.

AKA Tax Avoidance

THREAD!!! Capital Gains Tax 101 on immovable property aka house/flat etc

Disposal (most commonly the sale) of an asset has Capital Gains Tax consequences

The basic calculation:
Proceeds (how much you sold it for);
less Base Cost (how much you bought it for)
= Capital Gain/Loss The next step is to determine four key details:
1. In who's name is the property and is there an in community of property involved
2. How long was the property owned for
3. How long the owner stayed in the property
4. How long the property was rented out or used for business

To recap, here is the rules to #75Hard

1. If you fail a day, you have to start over
2. Stick to a diet, no cheat days, no alcohol
3. 4l of water a day
4. Two 45 min workouts a day, one must be outdoors
5. Read 10 pages of a non-fiction book
6. Take a progress picture I'm on day 10 currently.

Observations:
1. Waking up early to do the outdoor workout makes it easy to complete the first of two workouts.
2. Bonaqua Pump 750ml water bottle is excellent for this challenge.
3. Read your 10 pages early

One of the more frequently asked (business tax) questions I get is: What can I expenses can I claim?

This thread should give you some guidance / direction

[Thread] Let's start off with: Who can claim business related expenses?
Let's look at the Income Tax Act (ITA)
S11(a) - It must carry on a trade, but prohibits
S23(m) - Employment

In laymen's terms: Business expenses can be claimed by taxpayers carrying on a trade, but excludes employees

Life is a big giant MMO - going into a dungeon you have 3 roles:
- Tank
- DPS
- Healer

In order to win, you need to know your role (most people are hybrids) and how you fit in. In the popular MMO - World of Warcraft, players will often prefer a particular role: Tank (take damage / hold aggro), DPS (kill and try to stay alive) and healer (keep the group alive with healing spells).

In life however, everyone will fulfill each of these roles.

There are 3 main categories of tax:

1. Tax compliance (fixing the past)
2. Tax planning (preparing for the future)
3. Tax provision (saving yourself)

[Thread] 1. Tax compliance is the most basic function of an tax person. They simply make sure that your historical returns are submitted and kept up to date.

Tax compliance doesn't help you pay less tax - it simply keeps you up to date.

Tax thread time: Get your popcorn.

Taxes on gigs outside of employment. Here's a necessary evil that needs to be addressed.

Everyone will till you: Multiple streams of income!
But what they forget to tell you is: Multiple streams of tax! 1. Let me set the stage: You've landed yourself a nice job with a nice tax bracket to go with it. Say that bracket for our example is 41% (750k to 1,5m per annum of income).

We already know that the effective tax rate on 41% is closer to 29 - 32%...

Thread on bonuses and other windfalls (via employment) like share options and commission.

Getting a bonus is fun. But losing almost half your bonus to tax isn't fun.

Here's why it happens and what to do about it. 1. The salary is annualised;
2. The tax on the full annualised salary is calcuted;
3. The tax is then divided by 12 to get to the monthly PAYE to be calculated.

It's important to note that the annualised salary only takes into account THAT month (not other months).

To those individuals who comment: what is the total % tax (including income tax) that a person pays (VAT, excise duty, all the other levies etc) - here is my official statement:

Your effective tax plus whatever else.

It obviously differs from person to person. When I'm older and uglier, I want to do my PhD in Tax (with a philosophy angle) about Tax Morality, but from both the taxpayer and the tax authority point of view.

I reserve my opinion and any value judgement on the total tax per capita we pay vs what we get in exchange.

Short thread on marginal vs effective tax rates.

We know that the tax brackets ranges from 18 - 45% for individuals aka marginal tax rates.

For example, if you are in this range
0 - 216,000 taxable income is the 18% tax bracket

But you're NOT paying 18% tax...

@iamkoshiek Say your income was 120,000 for the year, if we take the tax rebate into account (15,714 for 2022 tax year), lets work out the effective rate:

120k x 18% = 21.6k LESS 15.7k = 5,886 tax

5,886 / 120,000 = 4.9% effective tax rate!

Short thread on goals and systems.

As we close out this year and plan for 2022, for those who feel like goalsetting isn't working for them - try the systems approach (credit goes to: @JamesClear)

Goal: Jiu-Jitsu black belt in 10 years
System: Go to Jiu-Jitsu twice a week 1. By creating a system (how / when / what you'll do on a daily / weekly basis) it feels like you're making steady progress.

What's great about the systems approach is that you don't need to operate with goals at all.

A thread: Twelve lessons over twelve years of employment:

1. Often you'll feel underpaid and/or underappreciated.

For the first few years of my career I earned 3 - 3.5k per month 2. Don't be a afraid to ask questions.

My oupa used to tell me: A good question is better than a good answer.

Today, I feel very generous

(Thread): How to claim Working from Home (as an employee) for the 2021 tax return. 1. What you'll need:
1.1 Square meter of your home and home office, for example: 100m2 and 10m2. This will give you a percentage: 10/100 = 10%
1.2 Letter from your employer stating that you were working MAINLY from home from x date to y date.
1.3 Bank statements / bond statements

Prepare for the 2021 tax season:
1. Dig out your eFiling login details,
2. Grab your income/deduction sources:
IRP5s for salary,
IT3B/IT3C for investment
RA cert for RA
Logbook for travel
Medical cert for medical etc
3. Request the 2021 tax return on or after 1 July
(Thread) 4. Compare the numbers on the 2021 tax return to the numbers on your own supporting documents (don't simply accept SARS info)

5. Click calculate on the 2021 tax return, to get an idea of any tax you might get back or have to pay SARS (the calculator does not incl Prov Tax paid)

[Thread] Before I take a bit of a break from Twitter, Section 12J VC companies are trying to get people to invest before 30 June 2021.

I'm here to warn you about them: 1. Section 12J investments are 100% tax deductible in the year that you make the investment...

[THREAD] The one director, one shareholder, one employee company.

Perhaps you've heard that a company only pays 28% tax and got the bright idea to register yourself as a company, doing the same work, and only pay 28% rather than at the 45% tax bracket.

Bring your tissues... Problem 1: How do you pay yourself? The money is yours after all.

Not really, it belongs to the company. Now you need to either pay yourself a salary (which you were getting in the first place) or dividends... And dividends is an after tax payment.

[Thread] As promised, here's my take on the tax implications and provisions in the Income Tax Act on cryptocurrencies. Credit to @SlwaneToYou for proofreading. 1. The Income Tax Act (the Act) defines cryptocurrency as a financial instrument, which means that the normal tax provisions within the act that applies to financial instruments will also apply to cryptocurrencies.

Thread on emergency funds: Most of us know what an emergency fund is - it's a fund (usually savings in a separate bank account) which pays for financial emergencies (unemployment, car repairs, medical costs, a leaking roof etc)

Emergency funds are when Murphy comes to visit. 1. In our story, we were privileged to have received a great retrenchment package which basically covered 14 - 18 months of our living expenses.

Imagine what would've happened to us if we didn't receive this...

Tax thread: Employees vs independent contractors.

1. Legally, the two terms are mutually exclusive and are direct opposites... sars.gov.za/AllDocs/LegalD…

Employee works for an employer.
Independent contractor is basically an entrepreneur. 2. This highlights two key points:

An employer has some measure of control over the employee.

An "IC" (short for independent contractor) is "his own boss".

It is the responsibility of the employer to determine that a person is either an employee or an IC.