The question of are medical expenses deductible for personal income tax purposes comes up a lot. Medical expenses are as a non-refundable tax credit. If you incurred medical expenses above a certain threshold of net income, then you can claim additional medical expenses. There is also a maximum amount that you can claim and each year and it can vary year to year. Amounts greater than this threashold will give rise to a 15 percent federal tax credit.
What Can I Claim For Medical Expenses?
An individual is allowed to claim expenses on your own behalf, your spouse and/or any close relative who is dependent on you for support. This can include your child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew or any of those relative of your spouse. Except for yous or your spouses child or grandchild, the person must be a resident in Canada during the year. The medical expenses claimed on behalf of a dependent child are pooled with those of you and your spouse for purposes of the calculation. For amounts paid on behalf of any other close relative depend on you for support, the expenses can excel the threshold for the dependant and are not pooled with yours.
Common Medical Expenses Available to Claim
There are an extensive list of expenses that are available for deduction, but these are some common deductions; payments to medical practitioners, dentists, registered nurses, hospital fees not covered by public health insurance, prescription drugs, institutional care, expenses for personal lodging in a group home, guide dog expenses, eyeglasses frames and lenses, hearing aids, dentures, cost of moving and renovating accessible housing, crutches, insulin needles, wheelchair lefts, speech synthesizers, visual fire alarms, and various other mobility aids.
Other Medical Expense Information
If you are self-employed, you are allowed to deduct premiums to a drug or dental plan, so these are not deductible for the medical expense credit.
When you calculate your medical expenses, you can select a 12 month period ending during the year. It does not have to be January till December. If you had significant expenses in different months, be sure to review and see if it is more beneficial for you to use a different 12 month ending period to maximise the medical benefit claim. You might also plan on when you incur your medical expenses and even pre-paying some major work to maximize your claim for the year. If your using a December year end and you have expenses coming up in January, consider paying them in advance or moving up your medical procedures.
As there is a threshold percentage of your income, an effective tax planning strategy is to combine all of the families medical expenses on one return. It is normally better for the lower-income earning spouse to make the claim since the threshold will be lower and able to claim more expenses, however depending on the amount, taxes paid by a higher earning individual could result in more savings.