Did you know that just about any cosmetic surgery was an allowable medical expense for tax purposes, regardless of necessity?
That is, until March 4, 2010, when the Canada Revenue Agency (CRA) shut this down.
Still waiting for that transplant, suction or augmentation?
Both surgical and non-surgical procedures purely aimed at enhancing one’s appearance are no longer eligible as allowable medical deductions, unless deemed a medical or reconstructive necessity.
This does not preclude you from claiming cosmetic procedures that took place within the seven years prior to the March 4, 2010, date, supported by receipts of course.
For taxation years prior to 2010, a T1 Adjustment is required.
Regardless of the elimination of this as a medical deduction, CRA’s list of allowable medical expenses is extensive.
I refer you directly to the CRA website for a complete listing (CRA line 330). Here are some of the more common ones that are often questioned as to their eligibility and are NOT allowed by CRA:
- athletic or fitness club fees, health programs, provincial health plan premiums, personal response systems (“I’ve fallen and can’t get up”)
- over-the-counter medications and vitamins (even if prescribed)
- organic food (unless a medically diagnosed necessity and only the incremental cost increase)
- diaper services and diapers (except necessity due to illness).
This area of tax policy is probably one of the most evolving.
Beyond the CRA reviewer on the phone, the auditor visitation, and even beyond the CRA appeals process, did you know there is a Canadian court dedicated just to tax?
The Tax Court of Canada is by far the youngest superior court in Canada and hears appeals spurred by the Income Tax Act, among other similar acts. It is the final recourse for Canadian taxpayers.
I mention this, because often the most interesting tax reading that crosses my desk are the rulings that come down from the tax court. What can I say, I lead an exciting life!
One of the more recent ones dealing with medical expenses was an appeal by an individual who required medically prescribed therapeutic hot tub and UVB unit treatments for a debilitating condition.
He could not afford the equipment but was willing to travel the 50 kilometres to his parents’ home where they had this equipment.
He claimed travel expenses (because it exceeded the 40 km travel threshold) to and from their place.
To make a long story short, after being disallowed by CRA, this case eventually made it to the tax court, where the travel expenses were allowed on appeal.
It appears this court continues to define medical services liberally if there is any interpretative “grayness” within CRA’s policies.
So my advice? It may be wise to ask.
If you have any particular topics you would like to read about, please contact me.
Ron Clarke has his MBA and is a business owner in Trail providing accounting and tax services. He contributes a column the first and third Mondays in February, March and April. Email him at ron.clarke@JBSbiz.ca