I am helping someone with their tax. The person is 66 years old and has an monthly retirement annuity payout of R7000 and monthly interest (from investments) of about R4000 that gets paid out also monthly to them. Should a tax return be filed,or are there exemptions? I know the over 65 year olds get exempt of certain amounts for interest earned,but im not sure if that is the only excemption,or is there a total amount of income they are excempt of? Or must you add the two excemption amounts together?
This person will not have to pay any tax, but they should still file a tax return to be fully compliant with SARS and make sure they are up to date. Their income from the annuity added together with the income from the interest less the interest exemption of R34 500 for the year will under the tax threshold.
Annesays: 20 August 2015 at 12:06
So if the person had this kind of income situation the last 3 years and did not file,will this be a problem? Will there be penalties? I also do not understand the interest excemption? Should you not add up all the interest received and deduct the R34500 only from there? Or is there a total tax threshold amount for this age bracket and what will that amount be?
TaxTimsays: 24 August 2015 at 8:19
Each age bracket has a different threshold which increases each year. However for interest the first R34 500 is exempt and therefore not taxable. So in the case above you would take the R7000 x 12 and then add (4000x12)-34 5000 which would be R84 000 R13 500 which is R97 500 which falls below the threshold for a person of that age for 2015. However in prior years it would be taxable as the threshold would have been a little lower given the person would have been below the age of 65 and therefore should be paying tax on these amounts. The interest exemption for below 65 years was also only R23 800. If they contribute to a medical aid remember you can use those contributions as credits to offset tax as well. Register for TaxTim and let us assist in completing the old tax returns.
Annesays: 24 August 2015 at 18:28
Thank you. If there are outstanding tax returns and penalties,will you still be able to help? And how much will that be?
TaxTimsays: 24 August 2015 at 21:45
We can assist per tax return, have a look at our Pricing Page for the different costs.
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