How to avoid the annual tax headaches

2014-02-09 14:00

Although the tax year ends in February, the closing date for your tax filing is usually in November.

If you open a tax file now and keep all your supporting documents in one place, it will save you the hassle and worries associated with tax-filing season later down the line.

Anthea Scholtz, a partner at Deloitte, says if you want to submit your tax return timeously, it is a good idea to set aside the following documents now:

»?IRP5/IT3(a) certificates issued;

»?A travel logbook if you are going to claim a tax deduction against a travel allowance;

»?Receipts for medical expenses directly paid by yourself and not your medical aid;

»?Proof of medical aid contributions made to the medical aid fund and the number of dependants on the fund if you are going to claim a medical aid tax credit;

»?Proof of contributions to retirement annuity funds; and

»?Proof of investment income like interest-income certificates.

Medical aid deductions and tax credits

For 2013, the monthly tax credit amounts for each month during the tax year that contributions were made to the medical aid fund are as follows:

»?An amount of R230 each for the taxpayer and his/her spouse or first dependant; and

»?An amount of R154 for each additional dependant.

If you are a taxpayer under 65 years of age (and who is not a person with a disability or has a spouse or child with a disability), you can claim the following tax deduction in respect of medical expenses:

»?Any annual medical aid contributions that exceed four times the amount of your medical aid tax credit; and

»?All your qualifying medical aid expenses (out-of-pocket expenses) that exceed 7.5% of your taxable income before this deduction.

Note that this rule will change from March 1 2014.

Karen Botha, tax director at PricewaterhouseCoopers, says your medical aid usually issues you with a tax certificate that sets out all the information required for your tax return, including contributions made by you and your employer, the number of dependants you have and expenses that were not paid for by your medical aid.

If you chose to pay cash for a few expenses and did not submit the invoices to your medical aid, you have to keep the cash invoices.

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