Marilyn Anderson of MarketAPeel sat down with Victor Logan of Winflex to discuss personal health care costs and how corporations can deduct these expenses against their corporate revenue.
Victor Logan has 20 years experience in the private health plan industry and offers his clients personal and customized service. If you are a Canadian incorporated business owner who wants to know more about reducing your corporate tax bill, read on.
Part one of the interview:
How can a private health plan benefit an Incorporated professional?
Within the tax laws of Canada there are certain professions, namely doctors, dentists, and lawyers, and professional real estate corporations, who have the power to become incorporated entities and as such, can use the benefits of a private health services plan to deduct medical, dental vision expenses for themselves and their families through the corporation.
What does Winflex do for incorporated professionals?
Let's just step back and understand there are only two ways you can write off medical dental expenses. One way is through your personal income tax, which everybody does. The other is a private health plan, which allows you to deduct 100% of your health expenses through the corporation.
The differences is a 100% deduction for the corporation, as opposed to a 15% partial tax credit on your personal income tax return.
The additional benefit is not only the health care expenses that people incur, but also providing wellness and prevention. Somebody can take vitamin C supplements, they can get a corporate gym membership, they can go for registered massage, they can go to a naturopathic doctor, they can go and have acupuncture done, and they can take care of their health to prevent sickness and disease, which improves productivity..
What about some of the other things that people are looking at doing now, in terms of prevention like scans for for specific thing?
Very good question. As Canadians, we have been lax in taking our healthcare in our own hands because our system makes preventative tests, like scans, difficult. By not having regular check ups, with full tests and scans, is almost like having a 55 year old car and never having your engine checked.
Now, having said that, you can get some false positives and some positive force. You have to be mentally prepared for the results, which can be something like a traffic signal, you either get a green light, an amber, or a red.
The green is wonderful. It means everything is going according to plan. So keep doing what you're doing.
If you get an amber, it's something that you should obviously look into and start making lifestyle changes. It's like having a mild heart attack. A mild heart attack means that things aren't right - so you make changes. And by the way, diets do not work. You have to change your lifestyle.
If you get a red then you have caught something early and at least there is a hope, because as you know, one in four people in Canada get cancer. It's tragic and much higher than I think most of us are aware.
Unfortunately, Cancer is not an easy disease to eradicate and even if you survive, there are costs involved and those costs are often not paid for by our system.
What happens if somebody needs home care? For example, how does that apply?
Good question.
The person in the home must be dependent on the person paying for the cost or the person in the home must be a spouse of somebody with an active business. For example, if you are a business owner and your spouse's in home care, then the cost of the medical portion of the home care is deductible, not the cost of the residents or the cost of the cleaning, things like that. But the medical portion under the right circumstances is 100% deductible to the corporation and aside from care, things like artificial limbs or wheelchairs, and other medical devices are 100% deductible to the corporation.
Are there a list of eligible deductions?
Yes, there is a long long list of eligible deductions, which I can send your readers. (Click here), and that list is continually being updated and changed. For example, the way Revenue Canada words the rules is - 90% of what expenses are sent to us must be eligible. - So, the other 10% can be items that are over the counter. For example, vitamin supplements, a toothbrush, cough medicine, things of that nature, these all relates to health and can be part of the 10% allowable deduction. This means you can deduct 100% of cost of your toothbrush against your corporate revenue with a personal health plan. Tomorrow, Revenue Canada may change the list, but for now, it's allowed.
Contact Winflex today: 778-895-7487
Marilyn Anderson is the Chief Communications Officer for MarketAPeel and interviews their clients to provide our content creators with the information their require. To learn more about how you can be interviewed go to www.marketapeel.com
Victor Logan is the President of Winflex Health Solutions and helps his clients navigate CRA's rules and laws around personal health plans, trusts, and other tax saving options. For more information about personal health plans go to www.winflex.ca
