TAXATION OF MARRIED PERSONS

Question

Mr and Mrs Carr, who are married in community of property, have the following income 
and expenditure for the year ended 28 February 2022:
Salary: Mr Carr (76 years of age)……………………………………………60 000
Mrs Carr (under 65 years of age)…………………………………..………...80 000
Interest (joint account)…………………………………………………………48 600
Rental income (fixed property)……………………………………………......52 000
Expenses relating to the rented property………………………………..…..13 000
Dividends (from South African companies)…………………………………..2 000
In addition, Mrs Carr in her spare time makes and sells clothing. Net income from this 
activity amounted to R25 000 for the 2022 year of assessment

GPT 3.5 · Answer

Given the information provided, the tax implications for Mr and Mrs Carr for the year ended 28 February 2022 would be as follows:

1. Salary Income:
- Mr Carr's salary of R60,000 will be included in his individual tax return. As he is over 65 years old, he qualifies for the additional tax rebate for individuals over 65, which is R8,790 for the 2022 tax year. This will reduce his taxable income.
- Mrs Carr's salary of R80,000 will also be included in her individual tax return.

2. Interest Income:
- The joint interest income of R48,600 will be split equally between Mr and Mrs Carr for tax purposes. This income will be included in their individual tax returns.

3. Rental Income:
- The rental income of R52,000 will be included in their individual tax returns. However, the expenses relating to the rented property of R13,000 can be deducted from this income to determine the taxable rental income.

4. Dividend Income:
- The dividend income of R2,000 will be included in their individual tax returns.

5. Income from Clothing Business:
- Mrs Carr's net income from her clothing business of R25,000 will be included in her individual tax return.

The total income from all sources will be aggregated for both Mr and Mrs Carr to determine their total taxable income. They will then apply any deductions, exemptions, and rebates available to them to calculate their final taxable income.

It is important for Mr and Mrs Carr to ensure that they accurately report all their income and expenses in their tax returns to comply with tax laws and regulations. They may also consider consulting with a tax professional to help them optimize their tax situation and minimize their tax liability.