As the financial year draws to a close, both individuals and businesses must engage in proactive tax planning to minimize liabilities and optimize deductions. Year-end tax planning isn’t just about reducing the tax bill — it’s about making strategic financial decisions that align with long-term goals.
For individuals, one of the most effective strategies is maximizing contributions to retirement accounts. In South Africa, for example, contributing up to 27.5% of taxable income (capped at R350,000 annually) to a retirement annuity can provide significant deductions. It’s also a good time to review capital gains and consider selling loss-making assets to offset taxable gains.
Donations to registered public benefit organizations are also deductible, up to 10% of taxable income. If you’re close to the threshold, consider accelerating deductible expenses such as medical costs or education-related spending before the tax year ends.
For businesses, reviewing asset depreciation schedules and investing in new capital equipment before year-end may allow for additional write-offs. It’s also smart to evaluate bad debts, writing off amounts that are clearly unrecoverable. Bonuses or staff incentive programs should be reviewed early — payments made before year-end may be deductible.
An overlooked aspect is provisional tax planning. Ensuring that estimates are accurate can help avoid penalties. Working with a tax advisor during Q4 can reveal missed opportunities and ensure regulatory compliance.
Year-end planning is about being proactive, not reactive. Done right, it not only reduces tax burdens but strengthens your financial position heading into the new year.
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