How To Maximise Tax Efficiency for Your Family
When it comes to family finances, every penny counts. Maximising your tax-saving strategies for your family is also securing a brighter future. TTT looks at how you can maximise your tax efficiency in child tax credits, education-related deductions, and family-related credits. The goal is to keep more and pay less – we’ll show you how.
Let’s start with Child Tax Rebates.
Have you ever heard of these before? And how can you incorporate this into your family?
In South Africa, there are several tax benefits and allowances that can be relevant to families. Ever heard of a Child Tax Rebate? This is for individuals who financially support children. This rebate, known as the Additional Medical Expenses Tax Credit, may apply if you have dependents, including children, with disabilities or certain medical conditions. Our TTT Tax Assistants are available to talk about this if you’d like to understand more.
Child Support Grants
We’ve heard about government grants, and in this context, they do exist under Child Support Grants. While not a tax benefit per se, the government provides Child Support Grants to eligible families. These grants aim to assist with the financial support of children in low-income households. For more information, click here.
Tax-Free Savings Account
TTT has spoken about those Tax-Free Savings Accounts (TFSAs) because they just make so much sense when it comes to extra savings. Timing is everything, especially when it comes to tax deductions. In a nutshell, TFSAs allow individuals to save and invest money without paying tax on the interest, dividends, or capital gains earned. Families can use these accounts to build tax-free savings for various purposes, including education and other child-related expenses.
We know that education is a big expense in a lot of households but it’s also an investment in your child’s future and so you want to be able to provide the best education available. That’s why TTT says, “why not get clever about it?” Let’s look at Education Credits. Whilst this is not specifically a tax credit, there are deductions available for education-related expenses. For example, individuals can claim deductions for qualifying tuition fees and additional expenses related to education. Once again, you’re welcome to speak to our TTT Assistants who will be able to give you more intricate details about this.
Medical Aid Tax Credits
South African’s are particularly good with their medical aid or health savings. At the same time, it’s a bit of a grudge purchase because we never know when we are going to need it. So, if there is a way to save, it might feel a bit better. Let’s look at Medical Aid Tax Credits. Families paying for medical aid contributions may qualify for tax credits. The amount of the credit depends on the number of beneficiaries covered by the medical scheme. One of our consultants will help you with this so that we can make sure you’re getting the best bang for your buck.
Donations Tax Exemption
Did you know that donations (to an extent) can be tax deductible? It’s called Donations Tax Exemption. In cases where family members provide financial support to one another, donations tax may be applicable. However, there is an annual exemption threshold, and certain donations between family members might be exempt from this tax.
Maximising tax efficiency for families does take some strategy and expert advice. Once it’s done, there are numerous opportunities for you to keep more of your hard-earned money. The TTT Team always recommend that you get expert advice so that you do this properly. You can also check out the latest guidelines from SARS. Let’s save where we can.