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Medical costs and my tax.

Did you know that you have two ways of claiming your medical costs from your taxable income? For South African taxpayers only under 65 years of age.

The first claim (or credit) is by way of the allowable medical tax credits.

If you belong to a medical aid and you have dependants then you may claim (for the 2016 tax year) R270 for your self, another R270 for the first dependant (normally your spouse) and R181 for each dependant thereafter, per month.

So if you are married and have 3 children you can obtain a tax credit of R1,083 per month (or R12,996 per annum) against your taxable income.

The R1,083 is arrived at by taking the first R270 plus adding R270 for your spouse, plus R181 for each of your 3 children (R543).

You may also claim an additional tax credit for your medical aid costs. This is calculated by way of a formula, viz. 25% of {(medical contributions less 4times medical tax credit, calculated above) less [7.5% of taxable income]}. This additional credit will also be deducted from your tax liability but it cannot create a refund.

A word of advice - the spouse who earns the least amount should be paying the medical aid contributions as this will assist you when calculating the second tax credit.

Hope you have found the above to be helpful? If you would like any questions answered please feel fee to contact me. Hope you are all having a good week so far and until next time, Cheers for now from your friendly tax helper.

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