Lucrative Year-End Tax Claims

The claims for medical expenses incurred for travel and modifying your home can be quite lucrative, but you’ll need to know what documentation to keep, because these are two areas that can attract the tax auditor. Here’s what you need to know:

Travel Expenses for Medical Reasons. Taxpayers who must travel 40 km or more to receive medical services not available in their community can claim the cost of such travel as the patient, and for one attendant. If the taxpayer is required to travel more than 80 km from their place of residence, then travel expenses may also include hotel and meal costs. Actual receipts can be used for costs of travel, including gas, hotel and meals.
 
Alternatively, vehicle expenses can be claimed using a simplified method based on a rate per kilometre. This method does not require receipts to be kept for vehicle expenses, only a record of the number of kilometres driven. Interesting tax trivia: if more than one province is involved, the rate is calculated based on the province in which the trip began. 

Home Modifications as Medical Expenses. These expenses may be quite substantial as well, so keep receipts, and make sure you can show that these costs were as a result of prescription by a medical practitioner. Here are some examples: 

  • Home Modifications. Incremental costs of building a new home, or modifying an existing home, qualify for a patient who is physically impaired or lacks normal physical development, where those costs are incurred to enable the patient to gain access to, or be functional within, the home. However, the expenditure must not be of a type simply intended to increase the value of the home, or an expense that would not typically be incurred by someone who was not impaired. 
  • Driveway Alterations. If a person with a mobility impairment alters the driveway of their residence to facilitate access to a bus, those costs can be claimed. 
  • Moving Expenses. For a disabled person to move to a more suitable dwelling, these expenses are also eligible, to a maximum of $2,000. 
  • Van Adaptations. An individual who requires a wheelchair can claim the lesser of $5,000 or 20 percent of the cost of modifying a van for the purposes of accessibility. 

RRSP Opportunities. Remember, the disabled become “first time” homebuyers for the purposes of the RRSP Home Buyer Plan if they have to purchase alternative accommodations as a result of their disability. This will allow the family to tap into funds tax-free if they have to move from a two-story house to a bungalow, for example, to accommodate the needs of the disabled person. 
 
When it doubt, consult with a tax specialist. This is a wise move that can unlock the door to new money to help pay for some of these expensive costs of lifecycle change.

Evelyn Jacks is Canada’s most trusted educator in the tax and financial services. Founder and President of Knowledge Bureau and developer of the Real Wealth Management discipline, she is also the author of 53 books.

Excerpted from Evelyn Jacks’ Essential Tax Facts, 2018 edition. Online purchases with free shipping available now.

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