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Tax Free Health Care for Business Owners in Canada
Private Health Service Plans allow Business Owners to provide Health Care coverage for themselves, their families and their employees and deduct 100% of their expenses.
Individuals who pay for medical and dental out of their own pockets are able to use those expenses as tax credits.
People need to know that first they can deduct these costs and apply a percentage to reducing their income tax to the government.
The second thing people need to know is what they can deduct. Any medical and dental cost that is considered medical in Canada is deductible. Revenue Canada has a page on their web site that shows what is allowed….. This list is not exclusive. They do not name everything. On a second web site page they list the practitioners whose fees are deductible. Do they make it easy for you? No they do not.
Once you decide you are going to account for your medical and dental costs you would be well advised to begin tracking your costs. If you are single or single with dependents, your costs simply need to be tallied. If you have a spouse, the person with the lower income is the one who will likely use these. Why you ask? I know, I know, usually the person with the highest income uses the deductions… In this case, Revenue Canada has thrown a wrench in to things…. you must meet the threshold of having spent 3% of your income in order to use the credit. For most of us, we increase our chance of using this credit if we use the lower income earner.
At year end, you tally your numbers, ensure you meet the 3% of income threshold, and deduct you credit according to Revenue Canada's percentage calculation on Line 130 of your Income Tax form.
Trudy comments, "Over the years I have learned that most people do not use all the tax deductions they are allowed. Why do people pay more money to the Government than they have to?"
Trudy Ames offers information for individuals and small business owners on how to use the tax deductions available to them at http://collaborativebizsolutionscanada.com/
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Collaborative Business Solutions supports small businesses in Canada implementing strategies to reduce taxes.