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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 medi... 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
Step 2
Calculate the amount of tax Marius must pay for the 2019/20 tax year.
Answer
To calculate Marius's tax payable:
- The tax payable on the first R423 300 is R100 263 (from previous brackets).
- The income above R423 300 is R551 762 - R423 300 = R128 462.
- The tax on this amount is 36% of R128 462, which is R46 448,32.
- Total tax = R100 263 + R46 448,32 = R146 711,32.
- The annual tax payable is R146 711,32. After the rebate of R7 794, Marius's final tax to pay is R138 917,32.
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.
Answer
One year older implies a tax rebate decrease. If Marius had been 65, the primary rebate would be R14 220 instead of R7 794.
- The annual tax before rebate would remain R146 711,32, so the new tax payable would be R146 711,32 - R14 220 = R132 491,32.
- Comparing monthly taxes: For age 64: R138 917,32 / 12 = R11 576,44 For age 65: R132 491,32 / 12 = R11 040,94
- Savings = R11 576,44 - R11 040,94 = R535,50, which is less than R600, thus the statement is INCORRECT.
Step 4
Determine the total monthly medical credits he would qualify for if he joined a medical fund.
Answer
If Marius joins a medical fund with his wife and two grandchildren, he qualifies for:
- Main member: R310
- First dependent (wife): R310
- Two additional dependents (children): R209 x 2 = R418
- Total credits = R310 + R310 + R418 = R1 038 per month.