Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year. During the 2019/20 tax year, Marius was not a member of any medical fund. Use TABLE 7 and TABLE 8 above to answer the questions that follow. 5.1.1 Identify which tax bracket Marius falls in, based on his taxable income. 5.1.2 Calculate the amount of tax Marius must pay for the 2019/20 tax year. 5.1.3 Marius stated that if he had been one year older, he would have saved more than R600 monthly on taxes paid during the 2019/20 tax year. Verify, showing all calculations whether his statement is CORRECT. 5.1.4 Marius is considering joining a medical fund. He plans to include his wife and two grandchildren. Determine the total monthly medical credits he would qualify for if he joined a medical fund.

NSC Mathematical Literacy Classifying and organising data: Marius, who is 64 years old, ear

Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year - NSC Mathematical Literacy - Question 5 - 2021 - Paper 1

Question 5

Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year. During the 2019/20 tax year, Marius was not a member of any med... show full transcript

Worked Solution & Example Answer:Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year - NSC Mathematical Literacy - Question 5 - 2021 - Paper 1

Step 1

Identify which tax bracket Marius falls in, based on his taxable income.

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Answer

Marius's taxable income is R551 762. Referring to Table 7, he falls into Tax Bracket 4, which applies to incomes above R423 300 but below R555 600. Thus, his tax bracket is Tax Bracket 4.

Step 2

Calculate the amount of tax Marius must pay for the 2019/20 tax year.

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Answer

To calculate Marius's tax:

The first R195 850 is taxed at 18%.
The next R353 350 (from R195 851 to R551 762) is taxed at 26%.

Total Tax Calculation:

Tax on R195 850: $195850 imes 0.18 = R35 253$
Amount above R195 850 and below R423 300: $423300 - 195850 = R227450$ Tax on R227 450: $227450 imes 0.26 = R59 138$
Amount above R423 300: $551762 - 423300 = R128462$ Tax on R128 462: $128462 imes 0.36 = R46 458,32$

Total Tax Payable: $35 253 + 59 138 + 46 458,32 = R140 849,32$

Step 3

Marius stated that if he had been one year older, he would have saved more than R600 monthly on taxes paid during the 2019/20 tax year.

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Answer

If Marius were 65, he would qualify for a rebate. The rebate for individuals older than 64 is R7 794.

Current Tax Payable: R140 849,32
Tax Payable after Rebate: $140 849,32 - 7794 = R132 055,32$
Monthly Tax Payable: $132055,32 / 12 = R11 004,61$
Compare with original: $R140 849,32 / 12 = R11 737,44$ The difference: $R11 737,44 - R11 004,61 = R732,83$ His statement is CORRECT as he would save more than R600 monthly.

Step 4

Determine the total monthly medical credits he would qualify for if he joined a medical fund.

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Answer

Marius plans to include himself, his wife, and two grandchildren.

Medical Credit for Marius: R310
Medical Credit for Wife: R310
First Grandchild: R310
Second Grandchild: R209

Total Medical Credits per Month: $310 + 310 + 310 + 209 = R1 139$

Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year - NSC Mathematical Literacy - Question 5 - 2021 - Paper 1

Worked Solution & Example Answer:Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year - NSC Mathematical Literacy - Question 5 - 2021 - Paper 1

Identify which tax bracket Marius falls in, based on his taxable income.

Calculate the amount of tax Marius must pay for the 2019/20 tax year.

Marius stated that if he had been one year older, he would have saved more than R600 monthly on taxes paid during the 2019/20 tax year.

Determine the total monthly medical credits he would qualify for if he joined a medical fund.

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