Dont Get Tax Pain! Claiming Medical Expenses
Feb 18, 2015
By Barret Procyshyn, Pharmacist at the Dauphin Clinic Pharmacy
With a new year upon us and spring rapidly approaching, tax season is coming into full swing. Understanding your taxes can be very confusing and not understanding what you can claim for medical expenses can literally lead to tax pain. Besides tax season creating more traffic at the accountants office, it also increases at the pharmacy. This is because our customers stop by the pharmacy for medication receipt print outs. If you are unfamiliar with our printouts; it is simply a list and total amount of medication expenses. It is much more convenient than saving all of your prescription receipts throughout the year. Thats right! You do not have to save each individual receipt from your prescriptions. Remember, even though I am giving you a few points on claiming medical expenses you should always talk to your accountant for specifics.
Your familys prescription medications can be claimed in the medical expenses category when doing your income tax. While it may seem like a good idea to get all kinds of medications filled as a prescription, over the counter medications never qualify as a tax deduction in your health claim.
Beside prescription medications; ambulance services, dental work, prescription eyewear, diabetic supplies and medical braces can all be used as a medical expense. Even laser eye surgery, home care services and orthopedics can be claimed as a valid health expense. Chiropractor, physiotherapist, dietician, audiologist and even amounts paid to a pharmacist for clinical services can all be claimed for income tax purposes. It is important to point out services provided by massage therapists are not tax deductible in Manitoba.
You will likely not see any benefit from medical expenses on your taxes, unless your total medical expenses reach 3% of your net income or $2171.00. For example if your net family income is $50 000 in a given year, you would have to have over $1500 in medical expenses during a twelve month period. However, the key here is that it is over a 12 month period and not necessarily in a calendar year. . If your medical expenses increased over two different calendar years and reach the 3%, it may be beneficial to make a claim for that specific 12 month period. If you do not meet the 3% or $2171 limit (whichever is less), medical expenses cannot be carried over to the next year. There is no maximal limit a taxpayer can claim in eligible expenses.
Travel for necessary medical services can also be claimed. If you are referred to a specialist away from your home, mileage and meals can both be claimed. As an example, if you are referred to a specialist in Winnipeg, you can claim a mileage and meal expense for the trip. For our rural and remote community listeners, if medical services are not available in your community and you must travel more than 40 kilometers to see a health care professional, you may claim your travel expenses. Be sure to always keep track of your medical expenses in some type of detailed log. Receipts obtained from the medical trips can be used or a simplified formula can be used which uses standard rates for both mileage and meals.
Do you currently work for an employer that offers a shared benefits plan? Perhaps you have a third party plan such as Blue Cross, Sun Life, Great West Life or Chambers group insurance? If you are paying into one of these plans, the amount paid is also tax deductible. So make sure to send in these receipts to your accountant. You are not allowed to claim the expenses if your employer is paying the insurance dues. Medications paid by Manitoba Pharmacare, workers compensation or other payers, cannot be claimed by you. Cosmetic procedures and blood pressure monitors also do not qualify.
Besides claiming health expenses there are also other related credits available, which you may qualify for. Parents can claim up to $1000 per child under the Childrens Fitness Tax Credit & Childrens Arts Tax Credit. There is also Family Caregiver Tax Credits and Child Disability Benefits.
Pharmacists always make it a top priority to keep health information confidential. Therefore ensure you give your tax advisor or accountant written permission to access your prescription receipts or better yet stop by your pharmacy and pick them up in person. For most people the deadline for filing income tax returns is April 30thso be sure you get it done!