Tax Tip Medical ExpenseTax Credit

– Hi, good afternoon. My name is Gemmar, Gem, Padin. I am a chartered professional accountant, here in Canada. I have my own accounting firm. I am helping business
owners pay less taxes with higher income through
tax strategy, or planning. So this morning, I was off from my usual day-to-day office work because I had to bring my dad and my daughter for a doctor’s appointment
for their annual check-up. Hey, ate Gina. Hey, Charmaine. How are you guys? So I just realized I need to
share something with you guys, as additional tax tips. I know that you are already aware that medical expenses here in Canada, you can claim a tax credit for that. So, I will just elaborate
on certain situations where you can maximize
the tax credit deductions, whichever is beneficial, should
the husband or wife claim. So in this instance,
we’re showing two pictures where the wife has a
lower income of CA$38,000. And the husband has an
income of CA$48,000. So for example, in a year, you have a medical expense of CA$4,000. And just so you know, you
cannot claim the CA$4,000 as an entire medical deduction. They have this cap where
in, they have a deductible– hi Suzzete, how are you? Hi Darren, how are you? So, they have this cap
of 3% of your income as a deductible expense. It’s just kind of like
an insurance deductible. So let’s say you have
CA$4,000 in medical expenses. For yourself, for your
husband, and for your kids. If you have an income of CA$32,000, 3% will be deducted,
or whichever is lower. They have a cap of CA$2,302. So whichever is lower, that’s the amount that you’re going to deduct
in your actual expenses. So let’s say you have an actual expense of CA$4,000, and you have
an income of CA$32,000. So, 3% of that is CA$960. And let’s say your husband
has an income of CA$48,000. So, 3% of that is CA$1,440. So now if you can notice, the client that has this lower income is the one who qualifies to
claim the medical tax deduction. Because in that way, you have more deduction to claim than
the spouse or partner that has this higher income. So in this case, the tax
tip for today is that for you to be able to
claim a medical expense and maximize the amount of tax deductible, compare the amount you can claim with the amount your spouse
or common law partner would be able to claim. It may be better for the
spouse or common law partner with a lower net income to claim the eligible medical expenses. Hi guys. Hi Gerry. Hey! How are you? Hope to see you in the
next two weeks again, for that netwroking event. And I’m hoping I can be there. Crossing my fingers that I don’t have that urgent client call. Anyway, so yeah. We’re just discussing medical expenses, tax credit on how you
can maximize who will be the one to claim, so you can maximize the allowable tax deductions. So in this case, a partner
who has this lower income will be beneficial to claim
the entire medical expenses. This is for the individual tax payer. Now for the small business tax payers, how can we maximize the
medical expenses part? Of course, you cannot claim a medical expenses for yourself, being
a small business owner. But what other small businesses do is they are purchasing or
having this insurance that we call business insurance, or key man’s insurance. Where there is 100% tax deductible. And in the event that something happens within the company, or the
decision-maker of the company, the insurance company
is going to reimburse whatever expenses are needed
to keep the company going. So in that case, you
can also claim that one as additional tax strategy
or tax deductible expenses. So, I guess that’s it for today. And if you ever have any clarifications with medical tax credit deductible, just reach out to me and I’ll be happy to answer all your queries. Let me know in what ever
way I can help you guys. “Can dental expenses be claimed?” Yes, Charmaine. Dental
expenses can be claimed. But there is a certain
amount you can claim and what are those allowable
deductions that you can claim. For further information,
you can reach out to me, and I’ll be happy to answer your question, with regards to tax deductible. Which one is tax deductible,
which one is not? Oh, hi Gerry. Yes, I know I
remember you are providing a healthcare plan to small businesses. So maybe some of my financial
advisor friends here and my social media friends, you guys can shout out
and send comments here. “What are those services
that you can offer to our small business?”. So that’s what I said earlier that as a small business owner, maximize your tax deductibility by getting yourself business insurance, or what we call key man’s insurance. In that way, if something
happens with the business decision maker, the insurance company will reimburse the company, in order for the company to keep going
to their usual business. So, that’s it for today. Hope to catch up with you guys again soon. Thank you so much. This is Gemmar, CPA,CGA or (Gem). I’m a chartered professional accountant helping small business owners pay less tax with higher income. So that’s it. Bye guys.

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