From medical aid deductions to medical tax credits - get 2013's new tax laws right and SARS will pay up!
Read this before you file your tax return! Every year, SARS tries to throw a wrench in the workings of personal tax season, so it doesn't have to pay up to hardworking taxpayers like you! In 2013, the big new change has been in the realm of medical aid deductions to medical tax credit. Find out how our FSP Business tax experts have decoded this mystery once and for all...
It seems like SARS puts tax filing on its head every single year! Don't let the new confusion around 2013's medical tax deductions get the best of you, here's how to come out on top…
Tax Returns Made Simple
(2013 edition) has this to say on the matter:
'Previously your medical expenses were allowed to reduce your taxable income through a SARS medical deduction. From the 2013 tax year, SARS has changed this. There are now two elements to reducing your tax through medical expenses – a medical tax credit and a medical deduction.' (Page 81)
What's the medical tax credit?
This is a monthly tax credit that SARS deducts from your payable tax every month. For 2013, the taxpayer is allowed R230 medical tax credit, R230 for the first dependent and R154 for every additional dependent.
Warning: The medical tax credit doesn't apply to you if you're over 65, because 65+ people get all their medical expenses as a deduction.
Can you still make medical deductions?
Yes, absolutely. The medical deductions include medical aid contributions that exceed 4x the medical tax credits, and medical expenses your medical aid didn't cover.
While the new SARS medical tax credit system may be confusing at first, it will actually benefit you as long as you use it correctly. Happy tax season!