Posted by: Liza | 2012/07/01

It''s tax filing season again...(Advice not question)

As the proverbial early-bird, I''ve already filed my return via sars efiling. According to their calculations and the statement of account I''m receiving a big refund this year again. So let me share my secrets...

If you suffer from any mental illness that impairs your ability to carry out activities of daily living to a moderate or severe degree, it qualifies as a disability and you can claim a much bigger refund for your medical expenses than a normal person. To try and assess your ability to function, google ''GAF score'' (Global Assessment of Functioning) so that you can see whether you qualify. You have to score 60 or below to qualify and this score must also take the whole year in consideration - you might have scored below 60 for one bad month out of the year, but if your average for the year was above 60, you don''t qualify. Your psychiatrist or psychologist also have to fill in a form stating what your GAF rating is and why it''s so low - this form can be downloaded from the SARS website.

The psychiatrist or psychologist also has to state whether it''s a long-term condition or just applied to the tax year in question. If they say it''s only applied to the tax year in question, you have to have the form filled in for each year. If your practitioner states on the form that it''s a long-term condition with little possiblilty of improvement, the form is valid for 5 years and doesn''t need to be filled in each year.

Also remember that you''re far more likely to be audited if you''ve had extra expenses not stated on your medical aid tax docs/IRP5 or if you''re claiming for travelling expenses etc. I had a small travelling refund on my IRP5 due to having to go into the office over one weekend - but I didn''t claim for this simply because I don''t have a log book/company car and a R100 refund is not worth being audited over. So if you only use the amounts stated on your tax certificates, they''re very unlikely to audit.

If it''s the first year you''re claiming disability, they might also be more likely to audit - but don''t let that put you off from claiming disability - the amount you get back would usually far outweigh the bother of being audited. Normal people can claim for medical expenses in excess of 7.5% of their salary. Those who qualify according to their GAF rating, can claim for medical expenses in excess of R500. e.g. If your medical expenses(including medical aid contributions) were R10 000, your yearly salary was R100 000: The amount a normal person can claim for is (R10 000 - 7.5% of salary(R7500) = R2500). The amount a disabled person can claim for is R10 000 - R500 = R9500. This is NOT the amount you get back, that is calculated using the percentage of tax paid, but that amount is then used to calculate your refund. A refund on R9500 would be 3.8 times more(9500 / 2500) than a refund on R2500 for a normal person.

This can become a very nice bonus when you''ve filed your tax return and get that refund. (Mine is in more than my monthly take-home salary according to the SARS calculation when I filed.) I''m just hoping I don''t get audited - it would be nice to have that money by Wednesday! (Got my refund 48 hours after filing last year through e-filing!)

Good Luck with filing season

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Our expert says:
Expert ImageCyberShrink

I'm sure people will find this advice useful. If I wasn't a total financial idiot, I might even understand it.

The information provided does not constitute a diagnosis of your condition. You should consult a medical practitioner or other appropriate health care professional for a physical exmanication, diagnosis and formal advice. Health24 and the expert accept no responsibility or liability for any damage or personal harm you may suffer resulting from making use of this content.

Our users say:
Posted by: Maria | 2012/07/02

Thanks Liza

Reply to Maria
Posted by: Liza | 2012/07/02

Hi Maria, that would depend on her age and whether or not she''s on his medical aid or her own medical aid. If she''s on his medical aid, then yes - he can claim for all her medical expenses. If she''s on her own medical aid however and over 21, it becomes a little murky. If she were over 21 and declared incompetent to manage her own finances with a court order, it would probably mean that her father would still be able to claim for her expenses since she''s legally dependent on him. I''m not quite sure about that however and in this case it would definitely be worth paying a tax-consultant to help with the tax return so that he can claim for as much as possible.

Good Luck

Reply to Liza
Posted by: Maria | 2012/07/01

Sjoe Liza, I wish I was as proactive as you, mine always goes in at the last minute!

My bipolar sister-in-law is virtually completely financially dependent on my father-in-law. He pays her medical aid and all expenses, would he be able to claim for that?

Reply to Maria
Posted by: cybershrink | 2012/07/01

I'm sure people will find this advice useful. If I wasn't a total financial idiot, I might even understand it.

Reply to cybershrink

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