This article explains why and takes a closer look at some of the expenses that you can claim for.
For many, the month of March signifies the beginning of a new financial year, which means financial services providers are starting to put their clients’ tax certificates together for a new season of tax returns. We receive a lot of queries from policyholders looking for income tax certificates for their 1Life policies. It is important to note that we do not in fact issue tax certificates to clients. This article explains why and takes a closer look at some of the expenses that you can claim for.
Life insurance secures your family’s financial future in the unfortunate death of a breadwinner and leaves you with the peace of mind that all will be taken care of. There are many expenses that are tax deductible monthly, but life insurance as well as funeral cover don’t fit into this category. Wondering why? The answer is that both your life insurance and funeral cover lump sum pay-outs are tax free, which means that when the time comes for you or your beneficiaries to claim the amount that you are covered for, no tax will be deducted, therefore your monthly policy contributions are not tax deductible ergo no tax certificate will be issued.
In the past, 1Life Expense Protector policyholders were able to get tax deductions for premiums paid. However, in terms of the Taxation Laws Amendment Act 43 of 2014, from 1 March 2015, contributions to income protection policies will no longer be tax deductible.
If you’re looking to understand what salary deductions you can claim for, here is a list from SARS:
- Pension fund contributions
- Retirement annuity fund contributions
- Provident fund contributions
- Legal costs under certain qualifying circumstances
- Wear–and-tear in respect of certain assets
- Donations to approved bodies
- Certain allowances - for example a travel or car allowance
Another portion of your expenses that you might get tax returns for are your medical expenses. TaxTim have designed an easy way for you to work it out with a medical aid tax credits calculator.
Remember to contact our client services team if you have any questions about your 1Life policy and income tax certificates. To read more on individual tax deductions and what applies to whom, visit SARS by clicking here.