Did you know you can write off the cost of travel, including meals, gas, and auto maintenance, to seek medical treatment if it is not available within 40km of your home?
Did you know you can write off the cost of moving, including meals, gas, and auto maintenance, to a new home in many cases?
Did you know that your private (not public provincial plans like MSP) medical and dental plan premiums are an eligible medical expense? So are eyeglasses and dental work and gluten-free food for people with Celiac disease, just to name a few.
Canada Revenue Agency (CRA) has released its Travel and Meal Expense Rates for 2010. For meals, you can either keep your receipts and submit for full claim, or you can choose to use the simplified method and claim a flat $17 per meal, to a maximum of $51/per day, per person. For auto expenses, you can keep detailed receipts for insurance, gas, repairs, total km driven in a year, and then calculate the cost per km driven in a year. You would then apply that rate to the kms you drove solely for the moving expense or medical travel expense. Or, once again, the CRA offers a simplified method where you use a straight per-km rate for your province, and multiply it by the actual kms traveled for the medical or moving expense. In BC the rate is $0.52 per km; the highest is $0.605 for the Yukon Territories. For all provinces, visit the CRA website under Meal and Vehicle Rates Used to Calculate Travel Expenses.
A lot of people don’t realize that they can claim a tax credit for many different and common medical expenses. If you have an “extended” or private health and dental plan through work, you can claim the premiums you paid (not if your employer paid them on your behalf; not any public provincial-sponsored plan; and not any life insurance portion) for the year. So check your last paystub from December – you may have paid over $1000 just in premiums this year! Other allowable expenses are eyeglasses, dental work, hearing aids, prescription drugs, and chiropractor visits – just remember, it’s only the portion of the expense that you have not been reimbursed for. There is an easy-to-read list of allowable medical expenses on the CRA website – it’s worth a quick browse through to see if you are eligible to claim any of them.
Now that I’ve got you all excited, a few things to note: You can claim expenses for you, your spouse/common-law, and your dependent children 18 or younger. The claim must be 3% of your net income, or $2024, whichever is lower. Either spouse can claim, you just need to do the math to see who it benefits more. You can claim your expenses for any 12-month period ending in 2010, that were not claimed in 2009. So, if you had a bunch of medical expenses in 2009 that you never realized you could claim, you can claim them in 2010, as long as you only claim for a twelve-month period. Your other option is to write CRA and ask for a re-assessment for prior years, submitting the necessary documentation. I did this about 4 years ago, after I found out a year later I could claim all the travel and meal expenses for my daughter’s numerous Ophthalmology exams. It was an easy process, and within 6 months I had just under $300 refunded to me by Mr.Revenue Canada. A small, but sweet justice for all those long kilometres spent stuck in traffic….
For a complete explanation on claiming medical expenses on line 330 of your return, visit the CRA website and look at their 2010 General Income Tax and Benefit Guide – start at page 43. Please note there are extra benefits available to low-income earners, as well as for other dependents, such as adult children and other family members. Check the guide for more info.
For moving expenses, CRA allows you to claim expenses if you moved 40km or more closer to attend post-secondary school full-time, to carry on a business, or to be employed. Some of the expenses you can claim are storage and transportation costs, travel expenses including meals and accommodations, temporary accommodations, legal and realty fees if you had to sell your home, vacancy costs if your home doesn’t sell, utility hook-up and disconnection fees, and the cost to change your address and driver’s license. Again, look at CRA’s website under Line 219 – Moving Expenses for a complete understanding.
Take a few minutes to look back at 2010 and see if you had any medical expenses or moving expenses that you think you can claim. Ask your tax professional for advice. Go back up to ten years and see if you have any claims you didn’t make, but were eligible for, and ask for the re-assessment. But my favourite saying is “claim everything reasonable and honest, and let the CRA tell you what you can’t deduct!” The worst they can do is say no, and you won’t get a deduction. The best you can do is get more of your hard-earned money back in your wallet.