Tax Tip: The More Obscure Medical Expenses

Are you claiming all the medical expenses you or your clients might be entitled to? 

The Canadian Loonie had a strong showing last month, chalking up impressive present values, which helped travelers especially to the US and Europe with their exchange rates. The value of the Canadian dollar vs other currencies was as follows: Month US Dollar Euro Mexican Peso UK Pound September 1.033 1.3535 0.08073 1.61044286 July 1.04268571 1.3358 0.08139 1.59522857 Average 2009 1.14197729 1.5855 0.08448 1.7835578 Why is watching the fluctuations of the loonie important to the Canadian economy, and more specifically those who work, spend and save in it? According to the Bank of Canada "Specifically, a rise or fall in the external value of the Canadian dollar will make Canadian goods and services less or more expensive for foreign buyers, and this will tend to boost or hold back their demand for our products. Movements up or down in the Canadian dollar relative to other currencies will also make imported goods more or less affordable, thus increasing or reducing the volume of our imports.î So while travelers rejoice, the strong loonie can hurt manufacturers, exporters and those who work in those industries affected by foreign buyers. Apparently there is not much we can do to control the value of our currency. The Bank's research shows that . . .î the evolution of commodity prices is the main driver of the Canadian dollar over time. Commodity prices, however, are essentially shaped by global forces that are beyond Canada's control.î Lots of other factors also influence the value of our currency: the world prices for commodities. Our relative economic performance. relative inflation rates relative interest rates Canada's productivity record trade and current account balances the size of Canada's public debt relative to that of the United States, as well as Canadian tax policies and incentives. short-term capital flows domestic political turmoil For more information, a good background article on exchange rates appears here: http://www.bankofcanada.ca/en/backgrounders/bg-e1.html Additional Education Resources: Knowledge Bureau Courses: Elements of Real Wealth Management Financial Literacy: Evaluating Risk and Return Tax Efficient Investment Income Planning

The Finance Department Released its update on economic projections on October 12, a fitting encore to a Thanksgiving weekend that had Canadians basking in beautiful sunshine in much of the country. Sunny too is the mood of investors, particularly with the news about our financial recovery, which has taken us back to a pre-crisis environment. However, the fly in the ointment is certainly the deficit, which has increased moderately to almost $56  Billion, according to the report, since the March 4, 2010 budget, primarily due to an accrual of $5.6billion in transitional assistance payments for recent provincial tax decisions to be paid in 2010ñ11 and 2011ñ12. Personal income taxes will also rise by 8.8 per cent in 2010ñ11, as our progressive tax system takes more from the anticipated growth in personal income, combined with the expiration of the Home Renovation Tax Credit. Corporate income tax revenues are projected to decline by 7.6 per cent in 2010ñ11. The department underscored that the Canadian economy "fared much better than other major advanced economies throughout the recession and over the recovery to date.î Our decline in GDP during the global recession was the smallest of all G-7 countries. However, looking forward into the short term, our GDP growth is expected to be moderate. Private sector economists expect a growth rate of 1.8 per cent in the third quarter of 2010 followed by an increase to approximately 2.5 per cent over the next three quarters. Interest rate projections have also been decreased since the March budget. Three-month treasury bill rates are now expected to be lower by an average of about 50 basis points between 2010 and 2014 while 10-year government bond rates are expected to be lower by an average of about 75 basis points. Further the unemployment rate for 2010 is forecasted to remain at 8.0 per cent, which is down only .5% since budget time. These economic trendlines and their impact on tax, investment, and retirement plannng will be discussed in depth at the Distinguished Advisor Workshops throughout Canada in November and at the Distinguished Advisor Conference in Orlando. In particular delegates will learn how these projections affect year end planning and a longer term strategic approach to family wealth management, respectively, at these events.

Golden Girl Finance Inc. and The Knowledge Bureau are pleased to announce their strategic educational partnership. Through this partnership, Golden Girl Finance hopes to inspire more women towards pro-active management of their personal and family wealth, as well as incite interest and excitement towards careers in finance. As Laura J. McDonald, co-founder of Golden Girl Finance along with Susan L. Misner, cites: Through our partnership with The Knowledge Bureau, we hope women will want to get more engaged in personal finance and careers in finance, surrounding themselves with their own circle of financially savvy friends!î Susan L. Misner echoes this enthusiasm: "Weíre very excited about working with The Knowledge Bureau and its innovative leader, Evelyn Jacks, one of Canadaís most recognized tax experts. The Knowledge Bureau offers opportunities for women to switch careers, maintain flexible hours that benefit their family, and light a real path in the financial services industry.î "We recognized that Golden Girl Finance was connecting with women and truly engaging them,î said Evelyn Jacks, founder and president of the Knowledge Bureau. "We are pleased to partner with such an exceptional opportunity to reach smart, savvy, influential women.î About The Knowledge Bureau The Knowledge Bureau is a national educational institute providing certificate training and professional development at a post-secondary level to advisors in the tax and financial services industries, as well as educational news and information services to their clients. http://www.knowledgebureau.com/ About Golden Girl Finance Golden Girl Finance was born out of a deep desire to inspire, motivate, engage and support women into taking control of their financial lives and futures. To connect women, to mentor them, and certainly to never underestimate them. And to make it all fun and, dare we say, fashionable. Absolute style backed by absolute quality and top notch content and expertise. Giving women the sweet on the street. http://www.goldengirlfinance.ca/

On October 5, the The Department of Finance announced the interest rates payable on Canada Savings Bond (CSB) Series 126 and Canada Premium Bond (CPB) Series 76, which are on sale now until November 1, 2010. These bonds have a 10-year maturity.  For the CSBs, only the rate for the first year has been set: 0.65%.  For the CPBs, rates or the first three years are set at 1.1%, 1.4% and 1.7% respectively. With Statistics Canada's latest inflation rate (August) sitting at 1.7%, plus the fact that interest earned on these bonds is taxable, it is unlikely that investments in either CSB or CPB will even protect investors from inflation much less increase the value of the investments. Educational Resources:   Learn more about the taxation of interest income and claiming of carrying charges in EverGreen Explanatory Notes from The Knowledge Bureau.  

An interesting change in the most recent income tax bill (C-47) is the introduction of new subsection 244(14.1) of the Income Tax Act, which authorizes electronic communications of a notice or other communication to a person or partnership.  Bill C-47  also changes the word "mailed" to "sent" in many areas of the Income Tax Act. This will accommodate the electronic transmission of notices both to and from CRA. Whatís interesting is that a notice or other communication will be presumed to be sent by the Minister and received by you at the electronic address you have most recently provided on the date before the message. This has all kinds of ramifications for significant compliance dates, appeal periods, and so on. Once an email address is given to CRA it must be kept up to date to avoid unintended and expensive consequences.  This new section as no effective date so one can assume that it will become effective when Bill C-47 is passed.  The bill is currently in first reading in the House of Commons. While the contents of Notices of Assessment, etc. will not be included in an email message for security reasons, the email message will serve as notification that the Notice of Assessment (or other notice) is available online in the person or partnership's secure electronic account.  Presumably the CRA will use the individual's "My Account" or "My Business Account" for posting such notices

The 2010 Manitoba provincial budget announced a new Fertility Treatment Tax Credit which allows a credit for 40% of the costs of fertility treatments, up to $20,000, including both the cost treatment and of drugs, (maximum credit $8,000). Eligible expenses incurred after September 2010 qualify for this new credit. Eligible expenses claimed as a medical expense using federal income tax rules may also be claimed under the provincial credit.  Expenses that are reimbursed may not be claimed. In an October 1, 2010 News Release, the following guidelines were provided: The credit may be claimed by either spouse (but may not be split between spouses). Claims may be made for expenses paid for fertility treatments provided by Manitoba licensed medical practitioners and infertility treatment clinics. Claim may be made for medications prescribed in Manitoba for fertility treatments, even if those treatments are not tied to a specific fertility program or service. Reversing procedures such as vasectomies or tubal ligations do not qualify for the credit. Educational Resources:   Learn more medical expense claims taking the Knowledge Bureau's certificate course Introduction to Personal Tax Preparation Services.