Thursday, December 06, 2007

Tax Update - Deduction of Medical Expenses

Presently, in terms of section 18 of the Income Tax Act, a taxpayer may deduct medical expenses for immediate family members from taxable income, provided these expenses exceed 7.5% of the member's taxable income. SARS has found it difficult to verify these expenses as medical schemes issue certificates in respect of all medical scheme beneficiaries, an not only for immediate family members who are the potentional subjects of deductions.

In order to stremline the SARS registration and sudot processes, the reference to immediate family for medical scheme mebers has been extended to include all medical scheme beneficiaries. This should hopefully simplify the administration for both medical scheme members and their beneficiaries.