Weekly Tax Tips
Pay for medical expenses and charitable donations in one year
Date: 25 Nov 2011
There is usually an added benefit if payments for charitable donations for two years are grouped into one year. This is due to the fact that the first $200 of donations is eligible for a 15% federal non-refundable credit in 2011 while the excess over $200 is eligible for a 29% credit. You’ll receive a slightly larger credit if you group two years of donations in one year.
In the case of medical expenses, only amounts in excess of $2,052 (limit may vary by province) or 3% of net income (whichever is less) are eligible for a credit. Note that in Québec, eligible medical expenses must be reduced by 3% of family income. If your medical expenses for the current year are already in excess of the threshold, consider paying for additional expenses which are expected to arise in the near future now. Although most medical expenses are only paid as the medical services or supplies are required, some types of expenses can be paid for in advance such as glasses or contact lenses. You may want to consider this if it helps you to get a larger credit. If you’re paying for a major expense on an instalment basis (such as braces for a child), consider paying the balance owing early to maximize your medical credit claim.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 25 Nov 2011.
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