How to Deduct Medical Expenses on a Tax Return
Claiming Medical Costs Under The Income Tax Act
On a regular income tax return for Canadian citizens, medical expenses are calculated on line 330 and the refundable medical expense supplement is on line 452. There are several medical expenses that many individuals may not realize can be eligible for this deduction and there are other methods to maximize the benefit of claiming this expense.
Save Money By Combining Expenses on Income Tax Return
Combining medical expenses for the entire family and dependents and claiming this amount on the income tax return of the spouse with the higher income may help make this more beneficial. Medical expenses may also be claimed for any 12-month period ending in the year the return is for. If the end of last year and the beginning of this year contained a high amount of medical expenses, it may be more advantageous to wait to claim this amount for this year’s tax return.
What Can Be Claimed Under Medical Expenses?
Canada’s Income Tax Act currently allows prescription medications only to be deducted as a medical expense. Be sure to keep careful records of all prescriptions. Over the counter medications as well as natural and holistic vitamins, supplements and medications are currently not allowed to be deducted as a medical expense in Canada. If a large amount is spent on natural health and holistic products, an extended insurance plan that covers may be financially beneficial. Though the cost of insurance may increase, this amount is deductible on an income tax return and may actually help to save on income tax.
Other medical expenses that can be claimed include premiums paid through employment or university for extended health and dental plans, other extended health insurance plans such as Blue Cross, travel health insurance (even when purchased separately for each trip), and in some cases equipment purchased for home use and renovations done to your home to accommodate an illness or disability, however certain regulations and conditions apply.
Renovation Expenses for Medical Reasons
Renovation or construction expenses that are necessary to allow an individual with severe or prolonged mobility impairment or who suffers from abnormal physical or mental development, are allowable medical expenses under certain conditions. The costs incurred can be deducted minus any other renovation rebates such as for the goods and services tax or home renovation tax. Eligible renovations include those that would not normally be incurred by individuals without illness or impairment such as wheelchair ramps, safety rails, elevators, stair-lifters, lowering counters for easier access, widening doorways and others. For more information see the Revenue Canada site and line 368 in the General Income Tax and Benefit return.
Further Information and List of Allowable Medical Deductions
See your Canada Revenue Agency Site for a complete list of allowable medical expenses. Most equipment , supplies and renovations require medical documentation or a prescription from a physician; be sure that deductions qualify before making purchases or claiming a deduction. Allowable medical expenses that are often overlooked include: laser eye surgery, ambulance costs, medical travel costs (in some cases), surgical hair transplants, allergy specific foods (with a prescription), prescription eyeglasses and contact lenses, dental and orthopedic costs.