Inam is 32 years old. In the current year of assessment, she had a taxable income of R275 000. She is married out of community of property to Dakalo. They only have one minor son. The son is diagnosed with a disability as defined. The whole family is registered on Inam’s medical scheme. She contributes R1 500 a month to the medical scheme and her employer also contributed R1 500 per month. She paid R25 000 qualifying medical expenses for the year. They have been members of the medical aid scheme for the full year of assessment. YOU ARE REQUIRED to calculate the medical scheme fees tax credit for the current year of assessment.a.R0b.R1 594c.R11 688d.R8 637
Question
Inam is 32 years old. In the current year of assessment, she had a taxable income of R275 000. She is married out of community of property to Dakalo. They only have one minor son. The son is diagnosed with a disability as defined. The whole family is registered on Inam’s medical scheme. She contributes R1 500 a month to the medical scheme and her employer also contributed R1 500 per month. She paid R25 000 qualifying medical expenses for the year. They have been members of the medical aid scheme for the full year of assessment. YOU ARE REQUIRED to calculate the medical scheme fees tax credit for the current year of assessment.a.R0b.R1 594c.R11 688d.R8 637
Solution
The medical scheme fees tax credit is calculated as follows:
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The first step is to calculate the medical scheme fees tax credit for the members of the family. According to the South African Revenue Service (SARS), the medical scheme fees tax credit for the 2020 year of assessment is R310 for the main member and the first dependent (Inam's husband) and R209 for each additional dependent (Inam's son). Therefore, Inam's medical scheme fees tax credit for the year would be R310 (for herself) + R310 (for her husband) + R209 (for her son) = R829 per month.
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The next step is to multiply this monthly amount by the number of months in the year to get the annual medical scheme fees tax credit. Therefore, R829 x 12 = R9 948.
Therefore, the medical scheme fees tax credit for the current year of assessment is R9 948. This option is not listed in the choices provided. Please check the question or the options again.
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