QUESTION 1 Mr Jacobs, a 52-year-old resident at Pretoria North, earned a monthly taxable income of R35 357.00 during the 2021/22 tax year. During this time, Mr Jacobs was a member of a medical fund for himself, his wife, and his two children. TABLE 1: TAX RATES FOR 2021/22 TAX YEAR | TAX BRACKET | TAXABLE INCOME | TAX RATES (in R) | |---|---|---| | 1 | 1 - 216 200 | 18% of taxable income | | 2 | 216 201-337 800 | 38 916 + 26% of taxable income above 216 200 | | 3 | 337 801-467 500 | 70 632 + 31% of taxable income above 337 800 | | 4 | 467 501-633 600 | 110 739 + 36% of taxable income above 467 500 | | 5 | 633 601-782 200 | 166 395 + 39% of taxable income above 633 600 | | 6 | 782 201-1 656 600 | 229 089 + 41% of taxable income above 782 200 | | 7 | 1 656 600 and above | 587 519 + 45% of taxable income above 1 656 600 | TABLE 2: TAX REBATES MEDICAL TAX CREDITS FOR 2021/22 TAX YEAR | YEAR | TAX REBATES | |---|---| | Primary | R15 714 | | Secondary (65 and older) | R8 603 | | Tertiary (75 and older) | R2 871 | | | MEDICAL TAX CREDITS PER MONTH | | Main member | R332 | | First member | R332 | | For each additional dependant | R224 | Use the information above to answer the questions that follow: 1.1 Determine Mr Malinga's annual taxable income. 1.2 Show with calculations that Mr Malinga will receive R334 medical tax credits for the 2021/22 tax year.
Answer (1)
To solve this question, we need to understand Mr. Jacobs's taxable income and the medical tax credits he can receive.
1.1 Determine Mr. Jacobs's annual taxable income.
Mr. Jacobs earns a monthly taxable income of R35,357.
To find the annual taxable income, multiply this by 12 (the number of months in a year):
Annual Taxable Income = R 35 , 357 × 12 = R 424 , 284.
Therefore, Mr. Jacobs's annual taxable income is R424,284.
1.2 Show with calculations that Mr. Jacobs will receive R334 in medical tax credits for the 2021/22 tax year.
According to Table 2, the medical tax credit amounts are: R332 for the main member and another R332 for the first dependant.
Mr. Jacobs is a member of a medical fund with his wife and two children. Therefore, since he has a total of three dependants (one spouse and two children), the credits are calculated as follows:
Main member: R332 per month.
First dependant: R332 per month.
Additional Dependants: R224 for each of the two additional dependants per month.
Monthly medical tax credits:
332 + 332 + ( 2 × 224 ) = 332 + 332 + 448 = R 1 , 112.
Annual medical tax credits (R1,112 per month for 12 months):
R 1 , 112 × 12 = R 13 , 344.
Hence, Mr. Jacobs receives R13,344 in medical tax credits annually for the 2021/22 tax year.
