Using medical expenses to your advantage at tax time

Wednesday, October 09, 2013
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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 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. 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.

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