We all feel that we pay too much tax. Luckily there are clever ways to use tax breaks to your advantage, and the best thing is that it’s legal. You can maximise your tax benefits before 28 February 2019.
Einstein didn’t refer to compound interest as being the eighth wonder of the world for nothing. He said:
“He who understands compound interest, earns it, he who doesn’t … pays it. It is the most powerful force in the universe.”
You can make a pre-tax contribution to your retirement fund every year. A pre-tax contribution means you are allowed to contribute up to 27,5% of the higher of your taxable income or salary before any deductions are made, capped at R350 000 per year.
You are also allowed by the government to invest R33 000 per year (up to a maximum of R500 000 during your lifetime) of after-tax money in a tax free investment (TFI) account.
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