Medical Aid Monthly Contribution VS Tax Credit on Medical Aid?? How to deduct?

Hi Tax Tim
Great website, very helpful over the last couple of months.
I am busy filling in my ITR12, and I have a lot of deductions, ie depreciation etc, but when I enter my medical aid contributions, (paid by myself, R 1900 per month), and I calculate my tax return, it shows in the 4008 field R0.00. Please advise how to make this amount come in to account and how does the new tax credit work in my case? Lastly, re-imbursive travel expenses, how do I deduct this? I travel some times for the company, and then by the end of the month I get reimbursed at a specific rate per/km. Is this double taxed? as the money used to put petrol in my car, I have already paid PAYE on it, and then obviously again at the end of the month? thanking you in advance.

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TaxTim TaxTim says:
2 July 2013 at 17:39

Very happy we are able to help you!

Unfortunately the extra medical expenses are subject to a very complicated formula, but what it simplifies to taking taxable income and multiplying by 7.5% and any amount over that threshold if you take your out of pocket expense will be allowed as a deduction.

For example:

R100 taxable income
R10 out of pocket medical expense

So R2.50 would be deductible as it is over 7.5% of R100.

How much are you reimbursed and how many km's do you drive for business?

TAX202 says:
2 July 2013 at 22:22

Hi TaxTim.
Thank you for your above answer.
On average I drive between 250 and 500km per month for business, and get re-imbursed at R2.19 p/km. But nowhere on my IRP5 does it show those monies paid back to me? Does it form part of total annual non retirement remuneration? Also, must a annual bonus form part of my annual remuneration, or is there a specific source code it must be declared under? Also leave paid out?
Thanking you in advance

TAX202 says:
2 July 2013 at 22:26

Lastly, a lump sum received from thr RAF, are those monies taxsble?

TaxTim TaxTim says:
2 July 2013 at 23:46

Lumpsums are subject to specific tax tables depending on the reason for receiving the lumpsum. They get taxed at most 37% and are withheld before being paid out to you. If you wish to provide us with your email address we can send the tables to you.

TaxTim TaxTim says:
3 July 2013 at 23:58

Annual bonuses will be shown under source code 3605. The reimbursive amount will not be taxable as it is below the SARS rate and you travel less than 8000km per year so although your employer should include this on your return it would not affect your overall tax position.

TAX202 says:
4 July 2013 at 10:40

Hi TaxTim,

Thank you so much for your answers thus far, it has clarified so much to me up to date.
My employer has added my salary, annual bonus, sick pay, leave pay, backpay and reimbursive travel expenses under source code 3601. How does this affect my PAYE? What is the appropriate steps to address this matter?

Thanking you in advance.

TaxTim TaxTim says:
4 July 2013 at 22:18

All the other Items are subject not employees Tax and therefore PAYE, but the reimbursive allowance should not be included as it is not taxable. Therefore your PAYE is too high if he includes this.

TAX202 says:
5 July 2013 at 7:19

Thanks Tax Tim.

Really helped a lot.

TaxTim TaxTim says:
7 July 2013 at 13:38

Always a pleasure!

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