TAX TIME TIPS
of April 30 is fast approaching
so here are 3 handy tips
to help you save on your income taxes.
Deduct Your Health & Dental Premiums as a Business Expense
You can deduct the Health and Dental premiums you pay as tax deductible business expenses on your income tax return. There are limits and rules. Check with your accountant that you qualify as self-employed, and into which category of limits would apply to you.
Here is a brief list of the rules:
1. At least 50% of your income must come from being self-employed. Or – no more than $10,000 of your annual income comes from other than being self-employed.
2. If you have No Arms length employees – $1500/adult and $750/minor child in your household – maximum premium deduction
3. If you have Arms length employees – premiums are proportionately deductible to what you pay for health premiums for your employees
Any excess premium beyond the limit would qualify towards your medical expense tax credit.
There are more details to these rules, so it is important to consult with your accountant to see what applies to you.
I have also put a document which you can download on my Individual Health Insurance – TAXATION page that describes further these rules. You can visit it here
Health and Dental premiums deducted from your paycheque or that you have paid, can be used as a medical expense in the Medical Expense Tax Credit area of your income tax return.
So add up all the premiums and then included them as a medical expense.
It all adds up. Adding these premiums to any medical expenses that you have paid for, that have not been reimbursed by the insurance company, under your group plan or individual health plan, can all be combined, and help you benefit from the Medical Expense Tax Credit.
P.S. If you are the owner of a business with a group plan, and have premiums deducted off your paycheck as an employee, you too can use these premiums on your personal income tax return. Of course, the portion of premium paid by the business (not the part on your paycheque) is only tax deductible by the business.
Remember to save all medical receipts (even if you file electronically) and your Health Claims Stubs. Health Claim stubs are usually called Explanation of Benefits, or EOB, and are your insurance reimbursement explanations.
More – It all adds up.
Expenses that that have not been reimbursed by the insurer, can be used as medical expenses on your personal income tax return.
These include deductibles you have paid including drug card deductibles, the co-insurance amount you have paid out of pocket – ie. if you have paid 20% of the expense. And amounts of claims that are over your plan maximums.
For info on Individual Health Plans – visit here
For info on Group Insurance Plans – visit here
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