Tax season can feel like a maze, especially when you’re trying to stay on top of deadlines, deductions, and SARS regulations. But here’s the thing: even small mistakes can lead to big headaches—think penalties, audits, or missed refunds. That’s why I’ve put together this guide to help you avoid common tax mistakes in 2025. Whether you’re filing as an individual, a small business owner, or a freelancer, this article will give you practical tips to stay compliant and stress-free.
Why Avoiding Tax Mistakes Matters
Let’s face it—no one wants to deal with SARS penalties or the hassle of correcting errors. But the truth is, many taxpayers make the same mistakes year after year. By understanding these pitfalls, you can save yourself time, money, and a whole lot of frustration. So, let’s explore the most common tax mistakes in 2025 and how you can steer clear of them.
1. Late Submissions and Incorrect Calculations
The Problem
Missing deadlines or submitting incorrect figures is one of the most common tax mistakes. Whether it’s provisional tax, VAT returns, or personal income tax, late submissions can lead to penalties, while errors in calculations can trigger audits.
Real-Life Example
Take Sarah, a freelance graphic designer. She missed her provisional tax deadline by a week and ended up with a hefty penalty. On top of that, she miscalculated her income, which led to an underpayment and additional interest charges.
How to Avoid This Mistake
- Set Reminders: Use tools like Google Calendar or SARS eFiling reminders to keep track of deadlines.
- Double-Check Calculations: Before submitting, review your numbers or use accounting software like Xero or QuickBooks.
- File Early: Don’t wait until the last minute. Filing early gives you time to fix any errors.
2. Misunderstanding Tax Laws
The Problem
Tax laws can be confusing, and misunderstanding them is a common tax mistake. For example, many taxpayers don’t realise that certain expenses are deductible or that they need to declare all income, including side hustles.
Real-Life Example
John, a small business owner, thought he could deduct personal travel expenses as business costs. SARS flagged his return, and he had to pay back the disallowed amount plus a penalty.
How to Avoid This Mistake
- Stay Updated: Regularly check SARS updates or subscribe to their newsletters.
- Consult a Professional: If you’re unsure about a deduction or tax rule, ask a tax consultant for advice.
- Use SARS Resources: SARS offers free guides and webinars to help taxpayers understand their obligations.
3. Overlooking Deductions or Exemptions
The Problem
Many taxpayers miss out on legitimate deductions or exemptions, which means they end up paying more tax than necessary. This is one of the most frustrating tax mistakes because it’s entirely avoidable.
Real-Life Example
Lerato, a teacher, didn’t realise she could claim deductions for her home office expenses and medical aid contributions. As a result, she overpaid her taxes by thousands of rands.
How to Avoid This Mistake
- Keep Detailed Records: Save receipts and invoices for all expenses that could be deductible.
- Know Your Deductions: Familiarise yourself with common deductions, such as:
- Medical expenses
- Retirement fund contributions
- Travel expenses (for business purposes)
- Use a Tax Consultant: A professional can help you identify deductions you might have missed.
4. Failing to Declare All Income
The Problem
Whether it’s income from a side hustle, rental properties, or investments, failing to declare all income is a serious tax mistake. SARS has access to banking records and can easily spot discrepancies.
Real-Life Example
Thabo, an IT consultant, didn’t declare income from a freelance project. SARS detected the undeclared income during an audit, and he had to pay back taxes plus a penalty.
How to Avoid This Mistake
- Declare Everything: Even small amounts of income must be declared.
- Keep Accurate Records: Track all income sources, including cash payments.
- Use SARS eFiling: The platform makes it easy to declare multiple income streams.
5. Not Keeping Proper Records
The Problem
Poor record-keeping is a common tax mistake that can lead to problems during an audit. Without proper documentation, you won’t be able to substantiate your claims.
Real-Life Example
Zinhle, a restaurant owner, couldn’t provide receipts for some of her business expenses during an audit. As a result, SARS disallowed those deductions, and she had to pay additional taxes.
How to Avoid This Mistake
- Organise Your Records: Use folders (physical or digital) to store receipts, invoices, and bank statements.
- Keep Records for 5 Years: SARS can audit returns up to five years after submission.
- Use Accounting Software: Tools like Pastel or Sage can help you maintain accurate records.
FAQs About Common Tax Mistakes
1. What happens if I make a mistake on my tax return?
If you realise you’ve made an error, you can submit a correction through SARS eFiling. It’s better to fix the mistake yourself than wait for SARS to find it.
2. Can SARS waive penalties for honest mistakes?
In some cases, SARS may waive penalties if you can prove the mistake was unintentional. However, it’s best to avoid errors in the first place.
3. How do I know if I’ve claimed all my deductions?
Review SARS’s list of allowable deductions or consult a tax professional to ensure you’re not missing out.
Tips to Avoid Common Tax Mistakes in 2025
Here’s a quick summary of actionable tips:
- Set reminders for all tax deadlines.
- Double-check your calculations before submitting.
- Stay updated on SARS regulations.
- Declare all income, no matter how small.
- Keep detailed records of expenses and income.
- Consult a tax professional for complex issues.
How Thrive CFO Can Help
At Thrive CFO, we understand how overwhelming tax season can be. Our team of experts is here to help you avoid common tax mistakes in 2025 and stay compliant with SARS. Whether you need help with filing, deductions, or record-keeping, we’ve got you covered. Contact us today to learn more about our services.