Online Teaching Tax Advice

[StangV2_0]

Hey Guys,

Avoided smack talk for this one.. Sorry @KURT_COCAIN

So, my wife has started online teaching to foreigners wishing to learn English. She resigned from her job last month and started her first lesson mid last week. The income potential looks very promising, and she is currently up to 3.5 hours lessons booked per day. They pay in US Dollar every 2 weeks.

Regarding the tax.. She will not be taxed before they pay her. How much does any tax guru here advise that she must set aside as to be ready for SARS when they knock? And I am sure they will. Would it be advisable for her to try get a CC? I have one from many years ago that I might be able to pull out deregistration process and give to her. I am going to be asking my accountant as well but no harm in asking here as well.

Also, what recommendations would people advise to perhaps assist with tax? Like for arguments sake she is currently using my PC to do her work. If we wish to add a 2nd pc in the house, would it be advisable for her to buy it herself and can any of this be claimed back? This will only be way down the line since we wish to try save a bit first. Just some advice regarding her spending habits and where it would benefit us come tax return time.

Anyone else have a Mrs./spouse/friend/Mistress doing this? Any advice will be appreciated.

Thanks.

 

[goldfritter]

Get a registered tax practitioner's advice. Even outside of Smack Talk, asking strangers on the Internet about matters of tax compliance is a recipe for pain.

Do this ideally before she gets paid the first time, to make sure her record keeping etc. is up to scratch.

 

[StangV2_0]

I am going to be asking my accountant as well but no harm in asking here as well.

Anyone else have a Mrs./spouse/friend/Mistress doing this? Any advice will be appreciated.

Get a registered tax practitioner's advice. Even outside of Smack Talk, asking strangers on the Internet about matters of tax compliance is a recipe for pain.

Do this ideally before she gets paid the first time, to make sure her record keeping etc. is up to scratch.

Yeah, I am planning that. However, I am really curious as to see if anyone else here has a spouse etc. doing this and what they have done tax wise, which I will then also take up with the accountant.

 

[JoE]

Assuming they're paying money into her bank account, that's a paper trail for SARS and being a resident of the republic she will be obligated to pay tax on that income especially since they're not taxing her for the work performed.

The right thing to do is to just pay it up front to avoid any issues. If you're looking at how to calculate then you'e going to base it off the rand amount that's in her bank account for the month annualised for 12 months and then apply the relevant tax rate based on the tax tables in the SARS site. Payment terms will depend on whether she's a provisional tax payer or not.

Since she's WFH effectively, you can claim portions of your home expenses as deductions but you're opening another can of worms there to manage the tax implactions when you sell your place down the line.

 

[JayDoubleYou]

I did WFM for a while. I claimed the shit out of everything. I think I paid R4K tax the entire year and earned north of 300 for the year. I took a massive risk, I was audited, submitted everything (Invoices for pc/log book for *made up fuel/business trips* ) and they were happy. I was also renting at the time a two bedroom place. I claimed 25% of rent/water/elec/internet.

I claimed my entire PC build, desk, chair.

It is up to you/your wife.

EDIT: I was a provisional tax payer.

 

[StangV2_0]

I did WFM for a while. I claimed the shit out of everything. I think I paid R4K tax the entire year and earned north of 300 for the year. I took a massive risk, I was audited, submitted everything (Invoices for pc/log book for *made up fuel/business trips* ) and they were happy. I was also renting at the time a two bedroom place. I claimed 25% of rent/water/elec/internet.

I claimed my entire PC build, desk, chair.

It is up to you/your wife.

EDIT: I was a provisional tax payer.

Thanks!

 

[MurieFury]

I'm self-employed with overseas US clients, so my experience paying provisional: I set aside 30% of my gross income for taxes, every time I get paid. I also claim for a home office. AFAIK, you'll have an easier time of it if you just have a separate bedroom that's used as a home office (also easier if you're renting, I think, but I can't speak to the owning side since I don't own my flat). I claim everything that goes in there -- PC, desk, chair, printer, ethernet cable, exam pad, pencil, everything. As for stuff like rent and utilities... the % relation of your home office in relation to your total home is how much you get 'back' (taken against the amount you pay); my current place's home office is 12%ish of my total unit, so 12% of my utilities, rent, internet, etc. is a business expense.

But to echo what others have said, get a tax person. Best investment you'll make as a provisional earner.

 

[JoE]

I did WFM for a while. I claimed the shit out of everything. I think I paid R4K tax the entire year and earned north of 300 for the year. I took a massive risk, I was audited, submitted everything (Invoices for pc/log book for *made up fuel/business trips* ) and they were happy. I was also renting at the time a two bedroom place. I claimed 25% of rent/water/elec/internet.

I claimed my entire PC build, desk, chair.

It is up to you/your wife.

EDIT: I was a provisional tax payer.

Lol. Nicely done. The 'audit' was system generated based on what you claimed. They generally don't look too hard at the smaller income brackets so doubt you'll get a call back unless somebody specifically fingers you out and even then it might be deemed not worth the effort.

 

[Dom]

Hey Guys,

Avoided smack talk for this one.. Sorry @KURT_COCAIN

So, my wife has started online teaching to foreigners wishing to learn English. She resigned from her job last month and started her first lesson mid last week. The income potential looks very promising, and she is currently up to 3.5 hours lessons booked per day. They pay in US Dollar every 2 weeks.

Regarding the tax.. She will not be taxed before they pay her. How much does any tax guru here advise that she must set aside as to be ready for SARS when they knock? And I am sure they will. Would it be advisable for her to try get a CC? I have one from many years ago that I might be able to pull out deregistration process and give to her. I am going to be asking my accountant as well but no harm in asking here as well.

Also, what recommendations would people advise to perhaps assist with tax? Like for arguments sake she is currently using my PC to do her work. If we wish to add a 2nd pc in the house, would it be advisable for her to buy it herself and can any of this be claimed back? This will only be way down the line since we wish to try save a bit first. Just some advice regarding her spending habits and where it would benefit us come tax return time.

Anyone else have a Mrs./spouse/friend/Mistress doing this? Any advice will be appreciated.

Thanks.

Her tax requirements may be provisional (half yearly through a tax year) - my honest advice would be work scenarios (in Excel) for her earning potential in a six month period & work an amount out according to the year's tax tables.

Also, if possible, find a room she can use as a home office - she can claim that space from the total property size. Expenses can be claimed up to a limit (only at the end of the year though.).

Keep all her slips (to be extra safe + compliant).

 

[JayDoubleYou]

Lol. Nicely done. The 'audit' was system generated based on what you claimed. They generally don't look too hard at the smaller income brackets so doubt you'll get a call back unless somebody specifically fingers you out and even then it might be deemed not worth the effort.

Called me a small earner. Hurts to live

 

[Confucius]

For a change @Dom gave some decent advise.

Best is to look at tax tables and put away a little more than is required. If she needs to pay less, then that can be regarded as her bonus.

Oh, if you own the property / pay the rent, SCREW her with her portion.

 

[TheJudge]

Provisional tax is great fun. Yeah, long time since I had to do it but basically you have to accept that whats in your account isn't yours. Learn the tax tables well so you can keep track of where on the table you are, remember us IRP5 plebs don't see our actual tax rate until bonus time, thats when we moan about so much money being stolen by SARS. We run on an averaged out tax deduction so March offsets next Feb's tax etc.

For forecasting look at what you've earned (watch expenses too) and see whether there is expected consistency in earning for the second half of the year. It can be hit or miss at first so I tended to get money back at the end because I overstated future earnings to not get penalised for underestimating.

 

[Dom]

For a change @Dom gave some decent advise.

Best is to look at tax tables and put away a little more than is required. If she needs to pay less, then that can be regarded as her bonus.

Oh, if you own the property / pay the rent, SCREW her with her portion.

You should know - I don't fuck around with tax or Oom SARS.

 

[Nosh]

You should know - I don't fuck around with tax or Oom SARS.

Dont worry @Confucius he too @Dom

#FuckSARS!

 

[Nosh]

I don't fuck

Thats a given...

 

[cdmnuy]

Ask the clients to pay on PayPal and forget about giving her hard earned money for SARS to buy BMWs for politicians.

 

[Dom]

Ask the clients to pay on PayPal and forget about giving her hard earned money for SARS to buy BMWs for politicians.

That is called tax evasion (beeeg baaaad) and SARS will definitely know about that.

 

[cdmnuy]

That is called tax evasion (beeeg baaaad) and SARS will definitely know about that.

😱

 

[StangV2_0]

Ask the clients to pay on PayPal and forget about giving her hard earned money for SARS to buy BMWs for politicians.

Well she is paid by her "Employer" and not by clients. The clients book lessons with Employer who then assigns them to available teachers. She had a choice to go Paypal or straight to her account. We decided to go straight to her account. Just simpler and more transparent.

 

[Dom]

Well she is paid by her "Employer" and not by clients. The clients book lessons with Employer who then assigns them to available teachers. She had a choice to go Paypal or straight to her account. We decided to go straight to her account. Just simpler and more transparent.

That is the right way to go - you want some concessions from SARS, you need to do your part first.

 

[Nimz]

@StangV2_0

Pls provide more info on the teaching job:
Requirements
Pay
Qualifications needed etc

You can DM me if you don't want to answer publicly.

I'm trying to help someone that's unemployed.

 

[ThatGuyJD]

Let me hit the WhatsApp. She'll have to register as provisional and do the twice yearly payment. Make sure you put aside a percentage based on the tables. A separate account would be a good idea.

 

[NeutronGTX]

Ask the clients to pay on PayPal and forget about giving her hard earned money for SARS to buy BMWs for politicians.

You're no better than the politicians then. You can't complain about those dodging and exploiting the system if you are doing it too...

 

[NeutronGTX]

How much does any tax guru here advise that she must set aside as to be ready for SARS when they knock? And I am sure they will.

I know this is probably just how you phrased it but that's not the attitude to have. You need to be proactive don't wait for SARS to knock on your door. You need to go knock on theirs. Officially it would be best to get a tax practitioner, but if it's only one source of income, it should actually quite easy to do it yourselves but that's up to you. The pro of having a professional do it is they will know all the ins-and-outs and should have insurance in case they screw it up.

 

[LouisABC]

Ask the clients to pay on PayPal and forget about giving her hard earned money for SARS to buy BMWs for politicians.

Suggestions/advise was mostly not bad, until this post. Sigh.

And yes, as the OP would have noted, provisional tax payer, with all deductions proposed claimed under 11(a).

Good advise was also to separate bank accounts for tall the income received, keeps it cleaner and easier record keeping. Also drive the expenses through it.

SARS are looking to complicate things going forward a bit, so depending on from whom funds are received from, you might have some additional tax burders in the near future. For now, no need to worry about it.

But yes, going this way, get a tax practioner to guide you. Fee shouldn't be a lot but will be a lot less, then penalties and interest SARS might raise, if not done properly.

 

[cdmnuy]

You're no better than the politicians then. You can't complain about those dodging and exploiting the system if you are doing it too...

maybe I’m not

 

[NeutronGTX]

Good advise was also to separate bank accounts for tall the income received, keeps it cleaner and easier record keeping. Also drive the expenses through it.

Definitely This. I have a rental property that I am now getting a separate account for after realising what a nightmare it is to comb through transactions on my regular account.