What Does a Negative Amount on a Tax Return Mean?

By Trev Gami •  Updated: 01/23/24 •  5 min read

When you file your tax return, you need to understand all tax laws so that you pay the right amount. For instance, you may get a negative tax return or a positive tax return, which may be confusing. You need to know the implications of having a negative tax return on your financial status. This will help you understand different opportunities for savings and your tax obligations. This post explains everything you want to know about negative and positive tax returns. 

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What Does a Negative Amount on a Tax Return Mean?

If you have a negative amount on your tax return, it means you should get a refund. The negative sign indicates that SARS owes you money. This usually happens if the taxpayer overpays taxes during a specific tax year. In most cases, when there are a lot of deductions, including contributions to a retirement plan or medical costs deductions, the amount of taxed income will be significantly lowered. 

If your business hires disabled people or gets credit for research, it is likely to get tax savings, which leads to a negative amount. If SARS owes you a refund, it will be processed electronically and deposited in your account in two or three days after getting the ITA34 assessment. However, a refund can be delayed due to different reasons. 

How Do You Know SARS Will Refund You?

When you check your Statement of Account (ITSA), it will reflect your transaction history during a particular tax year. Your tax account statement also shows the money you are owed, penalty, and interest if applicable. If SARS owes you some money, it will reflect on your ITSA, and the payment date will also be shown. You need to have an eFiling account that you can use to check the balance on your statement. 

How Do You Know if SARS Owes You Money?

When you log into your eFiling account, click on the ITSA statement icon on the top to check your balance. Your transaction history will be shown on your statement, and this is where you will check if SARS owes you money. Since all refunds are processed electronically, you can also check the payment date of the amount owed. 

When Can I Expect My SARS Refund?

If you are expecting a refund, you can get it within 72 hours or three days if your banking details are correct. You can log in to your eFiling account and check if you have a refund. If you have one, there is nothing you can do to influence the outcome apart from waiting for the money to be deposited into your account. 

SARS will first conduct an assessment of your tax, and you will get a Notice of Assessment (ITA34) if you have a refund. If you agree with the assessment, the next thing you should do is wait for the money. 

What Does a Positive SARS Balance Mean?

A positive balance on your account means you owe SARS money. If you owe SARS money, you will be liable for a penalty, which usually comes with interest. Therefore, you should try to pay the money you owe to avoid further penalties because SARS will recover its money from you in one way or the other. There is no way you can get away with the money you owe, so the onus is on you to do the right thing. 

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SARS uses different ways to check whether you owe it money or not. It is essential to use the SARS eFiling portal to check if you owe the tax collector any money. This portal allows you to see your recent payments to SARS and outstanding balances, if any. 

What Is the Penalty for Not Paying Taxes in South Africa?

Non-payment of tax is a punishable offence in South Africa, so ensure you do the right thing to avoid complicating your financial situation. Different penalties can be applied if you owe SARS money and you remain non-compliant even when you know that you have a debt to settle. 

When you have a debt, you will first receive a Notice of Assessment from SARS, and you will be given 21 days to respond. A fixed administrative penalty ranging from R250 to R16 000 is levied for non-payment of your taxes to SARS, and the figure depends on the size of your business and its taxable income. The penalty will recur for a maximum of 35 months. 

Therefore, non-payment of the money you owe is not an option because the debt will continue to accumulate in your account. Another thing you should know is that penalties come with interest, which will further complicate your financial situation. It is a good idea to make arrangements with SARS to pay the money you owe so that you settle your account.

SARS can also take different measures to recover the money owed by taxpayers. For instance, it can use garnishee orders where a court order is sent to the employer so they deduct the money owed by the employee. SARS also has the power to seize and sell your assets, such as furniture, vehicles, and jewellery, to recover the money you owe. 

SARS can access money in your bank account to recover your debt. Additionally, it can freeze your bank account to compel you to pay your debts. It can also take legal action to compel you to pay what you owe. 

If you earn taxable income, you should know the amount of money you should pay to SARS to avoid penalties. If you pay excessive money, you will be entitled to get a tax refund. This usually happens when you have a negative amount on your tax return. A positive amount means that you owe SARS money, and you may be liable for a penalty that comes with interest. 

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