Medical Expenses - how to claim them on your Canadian tax return.
When it comes to maximizing your medical expense tax credit in Ontario, there are several key accounting tips to consider:
Understand Eligible Expenses: Know what qualifies as medical expenses. In Ontario, this can include payments to medical practitioners, dentists, and certain other health care providers. It also covers prescribed medication, medical devices, and some medical-related travel expenses. Keep up-to-date with the Canada Revenue Agency's (CRA) list of eligible medical expenses.
Maintain Detailed Records: Keep all receipts and documents for medical expenses. This includes prescriptions, statements from healthcare providers, and records of payment. Organizing these documents chronologically can simplify the process at tax time.
Claim Expenses for Dependants: You can claim medical expenses not just for yourself, but also for your spouse, common-law partner, and dependent children under 18 years of age. For other dependants, certain conditions apply, so it's important to check the CRA guidelines.
Timing of Claims: Medical expenses can be claimed in any 12-month period ending in the tax year, not necessarily the calendar year. This allows for more flexibility in maximizing your credit. If you had significant expenses late in one year and early in the next, you might choose a 12-month period that captures both to maximize your credit.
Review the Disability Tax Credit Eligibility: If you or your dependant has a severe and prolonged impairment in physical or mental functions, you might be eligible for the Disability Tax Credit. This can significantly impact the medical expenses you can claim.
Remember the Threshold: Only expenses that exceed either 3% of your earnings or $2,635 (whichever is less) count. Add up all your expenses and include them on the income tax return of the lower income spouse for the greatest return.
Remember, tax laws and credits can change, so it's advisable to consult with a tax professional or refer to the latest information from the Canada Revenue Agency to ensure you're making the most of your medical expense tax credit.