Year-End Tax Tip: Brush Up on Medical Expenses

Claiming medical expenses can be painful for most taxpayers: there are so many receipts and tiny numbers involved. But it can be worthwhile, especially if you schedule your dental and medical treatments in a tax-savvy manner before year-end.

Most people know, for example, that they can claim medical expenses for their nuclear family: mom, dad and their minor children. But did you know you can also claim for others who are dependent on you if they are resident in Canada? That includes children over 18, grandchildren, parents, grandparents, siblings, even uncles, aunts, nephews and nieces.

There are also a host of interesting costs that are deductible, provided they are unreimbursed by a medical plan. So, for example, if you are on a medical plan at work and it covers 80 percent of all these costs, you can claim the 20 percent that is not covered by the plan. Furthermore, the premiums for the private medical plan are claimable too, including those provided by an employer. Check pay stubs and Box 40 of the T4 slip for the premiums in this case.

Often forgotten claims are the unusual ones:

• Medical marijuana or marijuana seeds, but they must be purchased from Health Canada, or a licensed person under the Marijuana Medical Access Regulations (MMAR). Costs of growing not deductible. Keep in mind, guidelines may change following legalization on October 17.
• For people who have celiac disease, the incremental cost of acquiring gluten-free food products can be claimed, but you’ll need to compare the cost of gluten-free vs non-gluten-free food products. That person must also have a written certificate from a medical practitioner that a gluten-free diet is required. Deductible costs include the incremental cost of gluten-free bread, bagels, muffins, and cereals, rice flour and GF spices. Only the costs related to the person with celiac disease are to be used in calculating the medical expense tax credit . . . so if others consume the same food with the patient, a proration is necessary. 

Generally, the costs of visiting the following medical practitioners are eligible: dentist or dental hygienist, medical doctor, optometrist, psychologist or psychoanalyst, chiropractor, naturopath, acupuncturist or dietician, to name a few. 

Eligible medical treatments include: medical and dental services, eyeglasses, hearing aids and their batteries, attendant or nursing home care, ambulance fees; service dogs, guide dogs or dogs to manage severe diabetes or psychological conditions, including care and travel for training; prescribed alterations to the home to accommodate disabled persons; cost of training a person to provide care for an infirm dependant; and even tutoring services for a patient with a learning disability or mental impairment.

Remember, the claim for medical expenses is reduced by 3 percent of the claimant’s net income (or the dependant’s net income if claiming expenses for other dependants), to a maximum of $2,302 in 2018.

This maximum is reached when net income is over $76,733. Generally, that means the spouse with the lower income will get the biggest claim, but it is worth nothing if that spouse is not taxable. In those cases, carry the receipts forward for a possible future claim, as medical expenses can be claimed in the best 12-month period ending in the tax year.

That’s where year-end tax planning really comes into play. By grouping expenses left unclaimed from last year, timing your expenses for this year may provide for a bigger claim in your best 12-month period. This could be from November 1, 2017, to October 31, 2018, for example. A DFA – Tax Services Specialist can help you through the process, provided that, as a taxpayer, you’ve done your due diligence in keeping the appropriate receipts and documentation.

Evelyn Jacks is Canada’s most trusted educator in the tax and financial services. Founder and President of Knowledge Bureau and developer of the Real Wealth Management discipline, she is also the author of 53 books.

Additional educational resources: Enhance your tax knowledge as a specialist in the field to help clients make the most of available tax deductions. Take a free trial of a course in the DFA – Tax Services Specialist Designation, or join us at the CE Summits this fall or winter!

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