Claiming Medical Expenses: Free Healthcare?

Free Health Care? Did you know that Canadians spend on average more than $1,000 on medical expenses each year? It’s estimated that government programs, via our taxes, cover about 72% of medical expenses, which means that we pay for the rest. Your clients may be over-paying on their taxes because they don’t know about medical expense deductions. 

Small businesses are critical to the health of the Canadian economy.  According to a recent study by the Government of Canada, small businesses (1-99 employees as defined by the Government) represented 97.9% of all enterprises in Canada. According to the same study, these businesses employed 8.4 million individuals in 2019 or 68.8% of the private labour force. In addition, small business contributed 41.9% to the Gross Domestic Product generated by the private sector in 2016.  Now that we are in past-pandemic mode, understanding the needs of small businesses will pay off in better tax and financial planning solutions. 

You may ask yourself, what is the difference between tax evasion and tax avoidance?

Now is the time you want your entire team stay up to date with the most recent changes in tax, investment, retirement and budget announcements so we have Big News for you: a special incentive for new subscribers to Knowledge Bureau Report. Invite your team, colleagues, associates and others in your circle of influence to stay in the know and you will be entered for a chance to win a ballot to win any of the following prizes:

No time to wait for hours on hold with the CRA?  Expand your tax season toolkit with Knowledge Bureau’s suite of immediately implementable tools including EverGreen Explanatory Notes and the Knowledge Bureau Tax Planning Calculators.  These tools are designed to provide you with answers to trigger questions your clients have about tax efficiency and the important financial decisions they need to make.

With recent interest rate hikes in the news, taxpayers will have more questions about the deductibility of interest costs.  Exactly when is interest fully deductible as a carrying cost or a business deduction? When does it form part of the capital cost of the property? Finally, when do new legislative proposals recently released by Finance Canada begin to restrict interest cost deductibility and for whom?  Here’s what you need to know to have more confident conversations between advisors and taxpayers:

RRSP season ended on March 1, so any contributions to be deducted on the taxpayer’s 2021 return must have already been made. These contributions cannot exceed the maximum RRSP contribution for 2021 which appeared on the 2020 Notice of Assessment. So long as the contributions made are less than the maximum allowed, the taxpayer can deduct as much or as little of the contributions made on their 2021 return. Complications arise, though, when the amount contributed exceeds the maximum.