Personal Health & Services Plan
If you are anything like me you are always looking for a tax deduction. I know we all have to pay our share of taxes but like most self employed or business owners the idea is to pay as little as possible but staying within the law.
Many have said to me that they already deduct their medical expenses on their income tax. That is true but not 100% of the expense. For example if you earned $50,000 and had a $3,000 medical expense you would only have about $255 as a deduction. That is a far cry from having a $3,000 deduction.
Looking back at the previous paragraph you need to be in a tax bracket of more than 25% for it to make sense and also remember your entire family is covered. That means any prescriptions your family needs, any dental work including orthodontics, glasses or contacts and any other medical needs your family may have.
Health Care Expenses can be paid in three different ways: Traditional Insurance, for example Blue Cross or Green Shield; out of pocket; or PHSP (Personal Health Services Plan). PHSP is only available to self employed individuals or business owners and it allows you to deduct 100% of all medical, dental or vision expenses on your income tax. I own one and it works.
What does it cost, you are probably thinking? There is a onetime set up fee of $295 plus GST and then it gets a little complicated. Let us say you have a $3,000 dental bill. You pay your dentist and then you write another cheque to the Company for $3,000 plus 10% plus GST on the 10% (in other words $3,315). That amount becomes your income tax deduction. We are not finished yet because the company sends you a cheque for $3,000 tax free that you can deposit into your account. So for $315 you receive an income tax deduction of $3,315.
Please give me a call or an email if you have any questions. There is a simple application to complete with no prerequisites of any kind. Remember only expense after the plan has been set up can be used for tax purposes.