I’m really hoping you’re up to speed on all of this, but you do know that the final deadline for the 2015 tax season for non provisional taxpayers is 27 November right?
If you happen to have dropped the ball on this one you still have a few days to get your backside into gear, which includes understanding the changes SARS has made to the medical scheme tax credits. Here’s a little on what we mean and how it works, including some calculations that may make you go cross-eyed.
What is it?
The Medical Scheme Fees tax credit is an amount calculated by SARS that reduces the normal tax amount payable by an individual. It has changed from the medical aid contribution deduction from income earned. The tax credit system levels the playing field in terms of the medical aid contributions and all taxpayers will get the same tax benefit.
How does it work?
Taxpayers under 65:
Step 1: Calculate fixed tax credit = tax credit of R257 per month per dependent for the first 2 dependents + R172 per month for any dependent after that.
Step 2: Calculate additional tax credit = (the amount of the individual’s medical aid contributions that exceeds 4x the total fixed tax credit (step 1) + qualifying out of pocket medical expenses) – amount equal to 7.5% of the individual’s taxable income x 25/100.
Step3: Total Medical Scheme Fees tax credit = total fixed tax credit + additional tax credit.
Taxpayer above 65, disabled or disabled dependents:
Step 1: Calculate fixed tax credit = tax credit of R257 per month per dependent for the first 2 dependents + R172 per month for any dependent after that.
Step 2: Calculate the additional tax credit = (the amount of the individual’s medical aid contributions that exceeds 3x the total fixed tax credit (step 1) + qualifying out of pocket medical expenses) x 33/100
Step 3: Total Medical Scheme Fees tax credit = total fixed tax credit + additional tax credit.
OK, are you still with us? I’ll be honest that actually caused me a mini-migraine, which is exactly why I decided to hand over all that hassle to Epic Tax. It’s really never been easier – you download the app (HERE), you get a highly-qualified tax practitioner to do the hard yards for you and you laugh at those still busy tapping at the calculator on Step 2.
If you’re worried that enlisting the help of a professional will set you back some real cash then consider this easy pricing model – rake in less than R350 000 per annum and it’s R235 you’re forking over; between R350 000 and R500 000 and it’s R345, and for you big swingers netting over half a million rand it’s a flat fee of R455.
They’re called Epic Tax for a reason my friends, because handling all that above yourself is so 2014.
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