How to claim your medical tax credit correctly in your provisional tax return
Figuring out your medical aid contributions when submitting your tax return is tricky - even more so if it's on a provisional tax return. Should you deduct the amount you arrive at from your taxable income or not?With the provisional taxpayer deadline just two weeks away on 28 February, it's time to make sure you're accounting for your medical tax credit correctly.
On 1 March 2012, medical tax credits replaced medical tax deductions .
This means employees no longer get a tax deduction for their medical aid contributions. says the Tax Bulletin .
But the medical aid contribution is still seen as a taxable fringe benefit that you must account for.
Here's how to ensure your medical tax credit is taken into account properly when completing your provisional tax return
SARS' new IPR6 provisional tax return eFiling form incorporates a provision for the medical tax credit. says Moneywebtax .
There's a space for you to enter the medical tax credi t. And it's easy to fill in.
You'll need to calculate it manually by allocating R230 per
month for yourself as the provisional taxpayer. and R230 per month for your first dependent and R154 for each additional dependent.
As easy as that.
Fill out your IRP6 form today and you'll soon have peace of mind
If your completed IRP6 form shows you don't owe SARS anything, you don't even have to submit it – but do so anyway so you have proof for your records.
If you owe SARS money and you submit your IRP6 form late ,SARS will slap you with unnecessary administrative penaltiesfor each month the submission is late.
So submit your IRP6 form today. and remember to keep a copy of all your workings for the required five-year record-keeping period so you can prove to SARS that your estimate was correct in case you're tax audited in future.
To complete your Provisional Tax Return in 7 easy steps, click here.
PS. We recommend you check out: Provisional Tax 101 . It gives you the step-by-step advice you need to estimate, calculate and pay over your provisional tax correctly - yourself!Source: m.fspbusiness.co.za