Tax tip: File away medical receipts until tax time
If you or a member of your family paid for medical expenses this year, you’ll want to claim the costs on your taxes.
“You are entitled to claim a credit for your own medical expenses, as well as those of your spouse/common-law partner, or others who may be dependent on you for support such as a child, grandchild, parent, grandparent, etc.,” says Chartered Accountant John Wonfor, National Tax Partner, BDO Dunwoody LLP, National Office in Toronto.
“Medical expenses can be claimed for any 12-month period ending in the taxation year, as long as they have not been used in a prior year’s medical expense tax credit. When filing a tax return, be sure to use the most beneficial 12-month period when determining the credit.”
“Each spouse can claim their own expenses or the couple can choose to consolidate them. If both spouses file a return, it may be advantageous to have the lower-income spouse claim medical expenses, as the expenses will be reduced by three per cent of net income to a maximum reduction of $1,844 in 2005 for federal tax purposes. If the lower-income spouse cannot make full use of this non-refundable tax credit, the spouse who stands to benefit the most finanally should claim them,” advises Wonfor.
For further information about taxes, contact a Chartered Accountant.
Brought to you by the Institute of Chartered Accountants of Ontario.