Most family farms have med-ical emergencies and ex-penses.
There’s often nothing that can be done to get around the financial burden.
However, there may be opportunities to recover some of the outlay through your taxes.
Understanding these opportunities and keeping good records can save you money.
All amounts paid for eligible medical expenses over a certain threshold entitle you to a non-refundable tax credit that will reduce the amount of taxes you owe.
This credit is not dollar for dollar on the amounts paid but is eligible based on a percentage of your net income. Eligible medical expenses can be claimed for yourself, your spouse and your dependent children under the age of 18.
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What is considered an eligible expense is not always obvious and at times can be overlooked. To help prevent this, it’s a good idea to keep all medical receipts in a safe place and present them to the person who prepares your personal tax return. This method is often easier than trying to remember everything that happened during the year and whether the payments are applicable.
If the receipts are for an expense ineligible for the credit, they can simply be discarded after your tax return has been filed.
Pharmacies can often provide a yearly printout that will summarize all the amounts paid to help ensure no receipt is missed or overlooked.
Eye glasses, contacts, water filters, air conditioners, whirlpool baths, moving expenses, hospital services, gluten-free products and attendant care are just a few of the items that may qualify as an eligible medical expense. Some may require a medical practitioner to prescribe them for treatment and others are generally accepted.
Have you replaced your furnace recently due to a chronic respiratory condition? This is one of the modifications to your home that can qualify for the medical expense tax credit.
If you have a severe and prolonged physical or mental impairment that has been restricting daily activities, you may be entitled to the disability tax credit.
If you or someone in your family has difficulty thinking, walking, eating or speaking and a medical practitioner will sign off on the proper form, you could qualify for additional credits.
The premiums paid to a health care plan also qualify for the medical expense credit.
Family farms should consider implementing a private health service plan.
Under the plan, the farm will incur the expense, receive a tax deduction for some of the amounts paid and allow family members to have medical coverage. This will help reduce the cost of medical expenses by using pre-tax funds and allow for additional peace of mind should something happen.
The costs of travel for medical purposes are another expense often overlooked. Just because you live on a farm doesn’t mean the cost of travel to see the doctor should come out of your pocket.
If you have to travel at least 40 kilo-metres one way from your home to obtain medical services, you may be able to claim vehicle expenses.
Also, depending on the distance and nature of the visit, you may be able to claim the cost of your meals and accommodations, not just for yourself but for someone to accompany you as well.
When deciding whether the costs you have paid for medical expenses are eligible, it’s recommended to contact a tax professional.
It’s important to discuss questions you may have to ensure you are taking advantage of every opportunity available.
