Using medical deductions in your tax return

Many people are fortunate enough to have benefit plans which completely cover their health and dental needs. But many other people only have partial coverage and still many others are not covered at all. I used to be fortunate enough to have all of my medical and dental needs covered at 100%. But after going back to school and taking a work placement, my benefits have evaporated. Luckily, Brian’s benefits have recently kicked in, but in the meantime, I have a stack full of medical receipts which I can use towards this year’s tax return.


How are medical expenses tax-deductible?

Medical expenses are a non-refundable tax credit. This means that if you owe taxes for the year, using these deductions will reduce the amount of tax you have to pay. But if you have deductions in excess if your owed taxes, you do not get a refund on top of that amount.

To claim medical expenses on your tax return, you just need to save your receipts over the course of the year, making sure that your receipts describe the service or product you received, the name of the patient (yours or your dependents), the date of the service or purchase, and who received your payment for the service or product. Then when it comes time to file your taxes, you just total up any unreimbursed expenses, and add them to your return.

Keep in mind that in Canada, you can only claim expenses if the total amount is greater than $2011 (based off the 2009 guidelines) or 3% of your income, whichever amount is less. The amount you claim is also less any reimbursement, such as from insurance providers or work benefits.


What medical expenses can I include in my tax return?

It’s not just prescription pills that you can include – orthodontic costs, glasses and contact lenses, and some medical equipment are included as well. Take a look at the Canadian tax guidelines for a complete list of what you can claim and what you can’t. For our American friends, take a look at this US site for details.

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