Using medical expenses to your advantage at tax time
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 workplace benefit plan or by coverage you’ve bought on your own.
While it is true expenses that have been paid by insurance are not eligible, unpaid
expenses may be claimed on your taxes. Not all plans are the same and most 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 insuranceand 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 sets a 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, vision care,
dental, but the credit also extends beyond medical products and services. 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
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. And Blue Cross
plan members with direct deposit can download their claim statements online.
Talk to a tax expert about medical expenses before you file your taxes.