METCs - Medical Expense Tax Credit

Want a Tax Reduction Strategy that makes you Feel Better?

Did you know that you could claim some medical expenses on your tax return? If your medical expenses are more than 3% of your income or $1,755 or more you can claim them on your income tax return. All medical expenses above this amount qualify for a 16% federal credit.

When tax time rolls around, there are a few things you can do to be prepared - and we mean be prepared to save some money on your taxes. First, verify that your expenses qualify for the Medical Expenses Tax Credit (METC) Look for the Interpretation Bulletin (IT-519R2) on this site:

www.ccra-adrc.gc.ca/E/pub/tp/it519r2-consolid/it519r2-consolid-e.html

Once you're certain all those trips to the dentist qualify, go dig up your receipts. Canada Customs and Revenue Agency will want to see your originals.

You can maximize your METC

"Within a family, either spouse can claim the family’s medical expenses,” says John Mott, a Toronto-based chartered accountant and author of the Tax Guide for Investment Advisors. “It’s usually beneficial for the lower-income spouse to make the claim.”

He also tells clients with elderly parents to keep the medical tax credit in mind when preparing for their parents’ returns. “As we age, medical expenses can become significant and are worthwhile to document,” he says.

"The 12-month period for which you are making the claim does not have to fall in one calendar year,” Gentes-Hawn says. “This is handy, for example, if you are having a lot of expensive dental work done over a certain period of time.”

Don't forget a note from your doctor!

Taxpayer Jo-Lynne Russell took her case to Tax Court, and won. She received a METC for the installation of hardwood flooring and an air filter. The renovations were made because Russell’s young son has severe asthma. The judge allowed the credit based on the written advice of the child’s doctor. According to the judge, the doctor’s “clear advice and direction confirmed in writing” for the removal of the carpeting and the addition of an air cleaner was “more than sufficient to constitute a prescription.”

Feel better now?

The Medical Expenses Tax Credit is great news. There is a fairly large list of items, such as glasses and even hot tub installation (not the hot tub itself, unfortunately) which we can claim as medical expenses. We just need to keep or receipts and get a note from our doctor and we're ready to save some money. We might even get some money back on our tax return!

Entrepreneurs getting by without any additional health coverage should consider establishing a health and welfare trust. Click here to learn more.

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Jim Kinnell, President of Kinnell Insurance and Financial Inc. and has been dedicated to providing health and living benefits offering the best combination of quality and price and 'peace of mind'. Visit http://www.Kinnellinsurance.com or contact him by email at : jim@kinnellinsurance.com

 

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