Medical expenses can only be claimed to the extent that they exceed 3 per cent of your net income, so having more expenses usually leads to bigger tax savings. That means it is important to keep all your receipts and documents if you are planning to make a claim. For example, if you earn $30,000, you need $900 in medical receipts to make a claim. So you must know what is eligible and what is not.
Even if you have healthcare coverage with your employer, you are probably paying a premium every paycheque to be part of the plan. And most plans involve deductibles or co-payments. All of these items are considered medical expenses. So if your health plan covers 80 per cent of your dental fees, you can claim the other 20 per cent on your taxes.
Premiums paid to provincial health plans, as in B.C. and Ontario, are not an eligible medical expense.
You can only claim amounts paid to health care practitioners who are authorized to practice in your province, so claims vary depending on where you live. For example, only B.C. covers traditional Chinese medicine. If you are not sure, the CRA website lists all the practitioners that are covered by province.
If you are looking at a major medical expense like dental work, you are allowed to claim the most beneficial 12-month period that ends in the tax year. This may help you claim all of the work on one tax return, rather than splitting it up. For example, if you have some dental work started in June 2011 and had the rest in January 2012, you could choose to claim your medical expenses from June 2011 to May 2012 on your 2012 tax return. This allows you to claim both dental receipts in the same year.
Travel medical insurance and hearing aid batteries are also considered medical expenses. But over-the-counter vitamins are not. Only medication dispensed by a pharmacist is eligible.
People who have to travel more than 40 kilometres but less than 80 are able to claim their mileage as a medical expense. However, parking is not eligible, and you are not allowed to claim accommodations or meals. If you have to travel more than 80 kilometres to receive medical treatment that is not available closer to you, you may claim mileage, accommodations, meals and parking. This is the only time hospital parking can be claimed as a medical expense. In either case you can also claim expenses of a companion if you are certified by a medical practitioner as being incapable of travelling alone.
If you are claiming medical expenses, it is important to keep all your receipts. This is when having an envelope or file folder for your tax receipts can come in handy. Collect the paperwork throughout the year in one location so you can maximize your tax savings when you file your return.