This tax season, challenging your knowledge on personal tax is nothing but fun. Here is another in a series of typical tax planning and preparation situations to test you.
You want to make a medical expense claim and here’s your pile of slips sitting on your kitchen table. What receipts can you include?
1. Crutches for your daughter for soccer injury – yes, as medical equipment
2. Tylenol as prescribed by your doctor – no, regardless of doctor prescription because over the counter items are not allowable
3. Vitamins as prescribed by your naturopath – no, regardless of who prescribes them
4. Gluten free food for your son – yes, but only the incremental expense above the normal cost for that type of food
5. Medical pot obtained with a Cannabis Regulations document – yes, only with this official document
6. Eye examination for the family – yes, but only the portion not covered by the government
7. Prescription sunglasses – yes, but must be a corrective prescription
8. Contacts – yes, but must be corrective prescription
9. Travel insurance including trip cancellation coverage – yes, but only the health insurance portion of the premium
10. Extended health plan premiums shown on your T4 – yes, but the input of this value is with the T4 schedule and transfers to the medical schedule
11. Private extended health plan and private dental health plan premiums – yes, but any portion paid by an employer is not allowable
12. Medical Services Plan (MSP) premiums – no
13. Tutor fees for your certified disabled child – yes, but must be paid to government registered educators
14. Fitness club membership & aquatic center pass – no, neither are allowable even if prescribed by a medical professional
15. Travel from Trail to Nelson for medical referral – yes, if the service is not available in Trail and since the distance is greater than 40km from home
16. Travel from Trail to Castlegar for medical referral – no, since less than 40km from home, regardless of the fact that the service is only available in Castlegar
17. Taxi ride from park to hospital 5km away when you twisted your ankle – no, since less than 40km drive
18. Ambulance fee for transfer of child from home to hospital – yes, for the portion not paid by government and is to or from a public or licensed facility, regardless of distance travelled
So you have the allowable expenses identified. It’s a collective household claim so add them all up for everybody in the house.
So you have them added up. The total of the allowable expenses must surpass 3 per cent of net income so it makes sense to claim them on the lower income earner’s return. And only the portion over the 3 per cent is that effective tax deduction.
It is a non-refundable credit so only the amount needed to reduce tax liability to zero is used. The balance is not refunded.