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Can we claim medical contributions as a tax deduction?

by , 18 September 2013
Do you know if you can claim medical contributions as a tax deduction? If not, you're not alone. Neither did Nick, a subscriber to the Practical Tax Loose Leaf service.

Let's see what he asked on behalf of his client, and what David van Niekerk, the Tax Helpdesk expert, a qualified chartered accountant and registered tax practitioner, advised Nick about deducting medical contributions.
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Can we claim medical contributions as a tax deduction on a tax return?
Sue was on a medical plan with the company she works for. She wasn't happy with this medical plan and wanted to change to a different medical aid.
Her company refused to change to a different medical provider. So, she had to cancel the medical aid with the company and she took out a medical aid on her husband's name.
She is paying for all the monthly contributions out of her account but the medical aid is on her husband's name.

Can she claim these medical contributions as a tax deduction on her tax return?
She has proof from her bank statements that she is paying the monthly contributions.

Let's see what David had to say.
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You can claim the deduction if it's in your name
Unfortunately she can't claim the deduction. But her husband can claim the entire deduction.

SARS is very specific when it comes to medical aid deductions. You can only claim the deduction if the medical aid is in your name. It's doesn't matter how many taxpaying beneficiaries there are on the medical aid, nor who pays it (between a married couple that is).
If you are married, we recommend you change your beneficiary listing so that the one paying the most tax is the primary member, and will thus get the tax deduction.

If Nick's client's husband earns more than she does, then it's probably the best way to structure their tax if you're looking at them as one unit for tax purposes. If not, then see if you can't move the medical aid into her name by setting her up as the primary member.

Do you have burning tax questions you'd like answered? Subscribe to the Practical Tax Loose Leaf today. Over 2000 of your peers are already benefiting from this service.
Until next time

Natalie Cousens
Managing Editor: Practical Tax Loose Leaf service

Ps. There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them. Click here to find out if you're taxing your fringe benefits correctly.

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