Marilyn Anderson of MarketAPeel sat down with Victor Logan of Winflex Health Services to discuss how Incorporated Canadian Businesses can deduct their personal health expenses against their corporate revenue. Read Part 1 of the interview In Part 2 they continue to discuss eligible deductions including health tourism.
If a child has been diagnosed with a learning disability, not a physical disability, how does that apply?
Good question. It's becoming more and more common, for example we see the incidence of autism going up. Autistic children are often in special needs schools with costs that can run in the 10 to $20,000 range. If we set it up right the tuition is completely 100% deductible to the corporation. There are two necessary factors that come into play. Number one is the diagnosis, it must be done by a professional. Number two, the school must be accredited. If those two things are in place and either of the parents as corporation, then the autistic child's expenses can run to the corporation.
Does that also apply to a situation where that the child is in that kind of school, but they have to have somebody come in and do private sessions as well in their home?
Absolutely. I do know a family exactly that circumstance and as long as the private tutor expenses are documented and it's not somebody's second cousin you're paying with cash. Everything must be documented properly, all i's dotted and t's crossed.
So summer camps for those children, if it's if it's a specific camp for children with that diagnosis?
Yes. But again, once you start getting into the special areas where each case must be looked at. Sometimes we will even write a letter to revenue Canada asking them that this is okay before our client pays for the expense to ensure it will be approved.
What is the most unusual thing anyone's ever claimed that was validated by CRA?
Drug Rehab. It gets more interesting when you realize the Canadian was going to California to stay very well known drug rehab facility that cost $40,000 US a month. It was legally deductible to the Canadian corporation's revenue.
Medical tourism is a trend. Can you talk about that?
Medical tourism is when people go to other countries to get their health care. Perhaps they go to Mexico to get dental work done because extensive dental work in Mexico costs 70% less than a dentist here. The challenge however, is making sure you're right dentist, otherwise you'll be going back and forth to Mexico or having to have it redone in Canada. It is buyer beware.
This has been going on for a while and it's something that will continue to exist. Many of the immigrants to Canada still have relatives in their previous home countries and they go back to visit, where they may have dental work done, this is all deductible against their income here in Canada. Any costs incurred by a Canadian, in another country, for medical, dental, vision is deductible in Canada.
In Canada, where you have grandparents, parents, and children living in the house, if the grandfather owns a corporation, is the grandchild orthodontist deductible?
Good question. Marilyn. The the ruling is that under a private health services plan, anybody under the same roof is considered a dependent and therefore deductible. They must be a blood relative and we are now getting instances where, particularly in Vancouver, we are finding that children are living with parents longer.
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