Get tax-smart before it costs you

Let’s be honest: tax season isn’t really the problem, it’s the timing. How things feel stressful when tax season rolls around because you’re already under pressure with work and life, and now you’re adding to it by digging through emails looking for invoices, trying to remember where things are and realising too late that something should have been handled months ago. This is where you’re potentially losing money. Not necessarily in big mistakes, but in the small, avoidable moments that build up over time. [You’re nodding in agreement, right - because it’s so simple, but…]

Individual tax: where people get caught

Most people think tax only becomes a thing at filing season, but the issues usually start much earlier. If you earn money outside your salary from freelance work, commission, side projects, rental income, or investments - that income is not always automatically handled the way your salary is, and that gap is where things start to slip.

Here’s the part most people don’t realise:

If you answered “I’m not sure” to two or more of these, try this:

If you’re earning extra income like this, there’s a point where SARS expects you to take a more active role. You may need to make advance tax payments during the year, not just file once when tax season comes around.

For example, if your non-salary income goes over a certain level and your total income sits above the tax-free threshold [currently R95 750 if you’re under 65], you’re likely considered a provisional taxpayer. That means paying tax twice during the year, usually around August and February instead of only dealing with it later.

Miss those deadlines, and SARS adds a penalty and interest. Not because you’ve done something wrong, but because the system expects you to know.

A simple first step is this:

List every way you earn money, even the small or occasional things. Then ask yourself: “Do I actually know what SARS would expect me to show for this?”

For many people, this is the point where it helps to sit down with a financial adviser and walk through it properly based on how you actually earn and what applies to you.

Business tax: where cash flow breaks

The cash flow problem most business owners hit isn't about not understanding tax, it’s about timing.

If you’re running a business, SARS expects you to pay tax in advance during the year, based on what you think you’ll earn. That usually means two payments:

• one around the end of August
• one around the end of February

The challenge is that you’re making those calls without having a full year of numbers. Halfway through the year, things are still moving… a big contract lands unexpectedly, expenses come in higher than planned and revenue shifts month to month.

So your estimate is just that: an estimate. But if it’s too far off, SARS doesn’t treat it lightly. If you under-estimate by too much, there’s a penalty on the shortfall, plus interest, and this is where things start to get tricky.

What this looks like in real life

You get close to a provisional deadline and realise you’re not entirely sure where the business stands: you’re relying on rough numbers, last year’s performance, or what you think the year will look like.

The business owners who handle this well aren't the ones with perfect forecasts - they're the ones who work with tax consultants to help them structure their business and finances.

On VAT (where another layer comes in)

VAT adds another layer of decisions… From April 2026, the compulsory registration threshold increased from R1 million to R2,3 million in annual turnover, so some businesses now sit below the threshold even though they’re already registered.

This has raised a question for many on whether deregistration is the way to go - imagine the reduction in admin! But it’s not that straightforward.

When you deregister, SARS treats it as if you’ve sold your business assets at market value. That means you may need to pay VAT on things like equipment, vehicles or stock.

So what looks like a simple decision can have a real cost attached to it. It also depends on your clients. If you’re working mostly with VAT-registered businesses, staying registered often makes more sense, because they can claim that VAT back. Again, it’s best to speak to an accountant about this to see what’s best for your business / situation.

Wills, estates and what people leave behind

Most people think of tax as something that shows up while you’re earning, but there’s another layer that only really comes into focus later…

What happens to your money when it’s passed on?

That’s where estate duty comes in, and it’s often the part people don’t think about until it’s too late to structure things properly.

Here's what many people don't realise: in South Africa, estate duty is levied at 20% on the value of your estate above R3.5 million. That's not the value of everything you own - it's calculated on your net estate after debts and allowable deductions. But once you add up a property, investments, a retirement annuity, a vehicle, and savings, a lot of ordinary South Africans with families and assets are closer to that threshold than they think.

Let’s put that into a real example: say your estate looks something like this:

• Property: R2,5 million
• Investments: R1,2 million
• Retirement annuity: R800 000
• Car and savings: R500 000

That gives you a total estate of around R5 million.
Now subtract the tax-free portion of R3,5 million.
That leaves R1.5 million exposed to estate duty.

Estate duty at 20% on that amount = R300 000. That’s R300 000 that needs to be paid before anything is distributed.

That’s where this becomes real, not in theory, but in what your family actually has to deal with, at a time when they’re already under pressure.

What matters isn’t just the number - it’s how everything is structured. Some things are handled differently:.

• anything left to a spouse is exempt
• retirement fund payouts go straight to nominated beneficiaries and don’t form part of your estate
• life policies can work the same way, as long as the beneficiary is named correctly

None of this is complicated, but it does need to be set up properly and checked over time, because life changes.

What being tax-smart actually looks like

Being tax-smart doesn't mean knowing everything or getting it perfect. What it does mean is dealing with things earlier, while you still have space to think clearly. It means knowing how you earn, understanding which tax obligations you have, keeping things in one place, and not leaving decisions until the deadline is already in the room.

For some people, this is where tools can make a real difference. Momentum clients have access to TaxTim - a simple, guided way to pull your information together, understand what SARS expects from you, and submit your return without having to figure everything out on your own. It asks you the right questions as you go, helps you organise your information, and keeps you on track with deadlines so you’re not trying to piece everything together at the last minute.

The role of a financial adviser

A financial adviser doesn't replace an accountant or file your tax for you. What they do is help you see the full picture earlier:

• how your income is structured,
• what obligations that creates,
• where the gaps and opportunities are,
• and what to take advantage of optimal tax structuring or what to do about them before thegaps turn into problems.

Remember: tax isn't one isolated thing; it's connected to how you earn, how your business runs, how your money is structured, and how your life changes over time. Most people only realise that when things feel messy.

A good adviser helps you step back before that point.

Final thought

If any of this feels familiar, that’s usually a sign to look at it now, not later. And remember, you don’t have to figure it all out on your own. A financial adviser can help you understand how your income is structured, what that means for your tax, and what to adjust now so it doesn’t become a problem later.

And if what you need is a clearer way to pull everything together and actually file, Momentum clients have access to TaxTim - a guided tool that helps you organise your information, understand what SARS expects, and submit your return with confidence.

Most tax stress is avoidable because the pressure usually comes from timing - leaving things too late, trying to fix them under pressure, and missing things you would have handled differently if you’d looked earlier. The important thing is this: don’t wait until the deadline is in front of you.

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