It’s Tax Time!

Use medical expenses to your advantage!

Ever wonder what medical expenses you can claim on your taxes?

You may think you’re not eligible for the tax credit because you’ve already been reimbursed by your benefit plan.

While expenses that have already been paid by your benefit plan are not eligible, any unpaid expenses may be claimed on your tax return.  Many plans include a co-insurance percentage, which is an out-of-pocket cost for you.  So chances are, you have expenses that were not covered by your insurance and are eligible to count toward the tax credit.

To qualify for the Medical Expense Tax Credit you must have expenses over a certain dollar amount before they will be recognized for tax purposes. This is a dollar amount set each year by the Canada Revenue Agency or 3% of your net income, whichever amount is lower.

While this amount is based on your net income, you can pool medical expenses for your whole family into one tax claim, making it more likely that your claim will exceed the threshold.

Eligible expenses include a range of costs such as prescription drugs, dental care, physiotherapy and registered massage therapy but the credit also extends beyond medical products and services covered by your health plan. As a rule of thumb, if a medical practitioner has recommended a product or service, there is a good chance that it’s eligible. The Canada Revenue Agency provides a list with a wide range of what’s eligible under the Medical Expense Tax Credit on their website.

The premiums you pay when you purchase coverage from Blue Cross or any other health insurer in Canada can also be claimed as a medical expense. And if you have benefits through your employer, you can claim your share of premiums paid through payroll deduction.

Small expenses can add up. If you have missing receipts for health and dental services, most practitioners will provide a yearly print out upon request.  Most insurers make your statements available for download online.

Talk to a tax expert about medical expenses before you file your taxes.

Created February 14, 2015 | Category: Health News and Tips