How we pay our medical expenses Using a fully insured plan Out of pocket Private Health Services Plan (PHSP)

There are tax consequences in not using a PHSP 3% Rule Using after tax dollars Why settle for a non-refundable tax credit when you can deduct the entire medical cost from income?

CRA 3% Rule …. Line 330 Your total expenses have to be more than either 3% of your net income (line 236) or $2,208, whichever is less. The calculation used takes three elements into account. Actual medical expense, less 3% of income, or $2,208 Which ever is less

$60,000 income with $2000 medical expenses Without PHSP Cost: $2,000 Deduct: $1,800 (3% Rule) $200 Provincial Tax Credit = 6% Federal tax Credit = 15% Total Non- Refundable Tax Credit $42 With PHSP Cost: $2,000 Fee(10%): $200 $2,200 Deductible as an expense $ 2432 includes taxes