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The biggest
difference between a McGill Private Health Savings Plan (PHSP)
and your regular health insurance is that a McGill PHSP provides...
- 100% tax-deductible health and
dental expenses.
- 100% coverage with more eligible
expenditures.
- No Monthly Premiums.
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In 1998,
the tax-free advantage of an PHSP was extended
by the Government of Canada to self-employed people,
sole proprietors of a business, professionals
and partners of a partnership.
Click
here to read the rules: Download
a Tax Information PDF
Federal Budget 2011
PHSP
contributions are deductable from business income
Must be administered
by a third party
Limits on overall amount
to be deducted
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How is this possible? The
Federal Government changed the Income Tax Act as a benefit
to self-employed and small business owners. Ironically it
was changed years ago and as of yet, so few Canadian small
business owners are taking advantage of it.
Even if you already have an insurance plan, add a McGill PHSP
and deduct the remaining amount / percentage your existing
plan doesn't.
COMPREHENSIVE HEALTH - Private Health Services Plan
TURN BASIC – AND NOT SO BASIC – FAMILY HEALTH CARE EXPENSES INTO SAVINGS
Your Comprehensive Private Health Services Plan can save you literally thousands in income tax
Independent contractors, realtors and other professionals and their accountants are alert to using every available business expense to reduce the tax burden on self-employed contractors’ income. Home office, automobile and cell phone are obvious examples. However, surprisingly few are aware of recent innovations in Private Health Services Plans, and the tax savings potential of these flexible “self-directed” plans. In a nutshell, all of those family health care expenses – from glasses to physiotherapy to orthodontics – can be processed through your Comprehensive PHSP into a 100% deductible business expense. So if family health costs and insurance premiums run to $4,500.00 per year, a successful small business professional can easily reduce their tax bill by over $2,000.00 by year-end.
What is your Comprehensive Health - PHSP? Click here for an Application Form
Your Comprehensive Health - PHSP is just about any insurance plan that covers medical, hospital and dental expenses. All health insurance policies such as policies from Sun Life, Great West Life, and Manulife qualify.
In addition, there are several innovative ideas for tailoring your optional plans that deliver flexibility and value to you, while maximizing tax savings. This gives the small business professional the ability to control how much is contributed, what expenses qualify for the savings, and makes sure that every dollar drives taxes lower. There are no caps on particular expenses; no limited percentages on what the plan will pay. The result is a much better tax break since all applicable expenses are included, and the tax reduction is at the taxpayer’s highest marginal rate.
McGill Health Services, a Toronto-based firm, has a strong focus on independent self-employed contractors - especially in the real estate industry - which it has served for over 25 years.
McGILL HEALTH SERVICES
1 St. Clair Ave. West,
Suite 303,
Toronto, Ontario
M4V 1K7
Office: 416 484 9921
Fax: 416 981 8837 |
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For a comprehensive listing of eligible
expenses please click here: Section
118.2 of the Income Tax Act
MEDICAL PROFESSIONALS
A medical practitioner encompasses a broad range of individuals
in the medical profession who are authorized to practice in
accordance with the practitioners governing body, including
but not limited to the following:
Acupuncturist |
Nutritionist |
Naturopath |
All
Optical Services |
Optician |
Optometrist |
Psychologist |
Psychiatrist |
Psychoanalyst |
Neurologist |
Orthopedist |
Chiropodist |
Podiatrist |
Obstetrician |
Pediatrician |
Practical
Nurse
(For medical service) |
Registered
Nurse |
Christian
Science
Practitioner |
Orthodontist |
Dentist |
Dental
Mechanic |
Ophthalmologist |
Therapist |
Speech
Therapist |
Osteopath |
Oculist |
Gynecologist |
Surgeon |
Dermatologist |
Physician |
Chiropractor |
Physiotherapist |
Plastic
Surgeon |
HOSPITAL SERVICES
Anesthetist |
Oxygen
Masks, Tent |
Vaccines |
Hospital
Bills |
Use of
operating Room |
X-Ray
Technician |
MEDICATION
All
Prescription Drugs Insulin or Substitutes Liver Extract-
injectable for pernicious anemia |
Any non-prescription
medicines (over the counter) prescribed by a qualified
medical practitioner and recorded by a licensed pharmacist |
Tapes
or Tablets- for sugar content tests by diabetics,
if prescribed |
Chinese Medicine |
Viagra |
Oxygen |
Vitamin
B12 – for pernicious anemia |
PRESCRIBED MEDICAL TREATMENT
Blood
Transfusion |
Healing
Services |
Psychotherapy |
X-Ray
Treatments |
Radium
Therapy |
Hydrotherapy |
Bone
Marrow or
Organ Transplant |
Insulin
Treatments Injections |
Speech
Pathology or
Audiologoy |
Diathermy
Nursing (by Registered Nurse) |
Ultra-violet
Ray
Treatments |
Electric
Shock
Treatments |
Pre-Natal,
Post
Natal Treatments |
Whirlpool
Baths |
Laser
Eye Surgery |
OTHER MATERIALS AND APPARATUS THAT
DON'T REQUIRE A PRESCRIPTION
Any
apparatus or material, paid to a doctor, nurse or
hospital |
Artificial
kidney machine, including installation, operating
costs |
Blood
sugar level measuring devices for diabetes Laryngeal
speaking aid |
Crutches |
Artificial
Eye |
Hernia
Truss |
Colostomy
pads |
Illestomy
pads |
Artificial
Limb |
Iron
Lung |
Spinal
Brace |
Brace
for a limb |
Any
device to aid the hearing of a deaf person including
bone conduction telephone receivers, extra loud audible
signals and devices to permit volume adjustment of
telephone equipment above normal levels |
Catheters,
catheter trays, tubing diapers, disposable briefs
required by incontinent persons |
Wheel
Chair |
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ALL DENTAL SERVICES
Dental
X-rays |
Extracting
Teeth |
Oral
Surgery
(e.g. Root canal) |
Denture
Repairs & Replacement |
Filling
Teeth |
Straightening
Teeth
(e.g. brace) |
Examinations |
Gum Treatment |
Cosmetic
Procedures |
LABORATORY EXAMINATION AND TESTS
Blood
Tests |
Metabolism
Tests |
Stool
Examination |
X-Ray
Examination |
Cardiographs |
Spinal
Fluid Tests |
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Urine
Analyses |
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OTHER EXPENDITURES
Ambulance
Charges |
Colostomy
pads |
Prescription
Birth Control Pills |
Home
Maker Service and Home Care (attendant must be a non-relative) |
Transportation cost-to
hospital, clinic or doctor’s office to obtain services
not otherwise available |
Rehabilitative
therapy, lip reading and sign language training |
Specially
trained animals to assist the blind, deaf, for severely
impaired persons, including the cost of its care and
maintenance |
Transportation, meals
and accommodations (reasonable expenses for meals,
accommodation and travel costs for patient and an
accompanying attendant may be deductible if;
1. equivalent medical services are not available locally;
2. The route traveled is reasonably direct;
3. Medical treatment is reasonable and distance traveled
is at least 80 kilometers) |
Reasonable
costs for adapting a residence to accommodate a disabled
person (e.g. wheelchair ramp, lifts, bath facilities) |
EXPENSES THAT DO NOT QUALIFY
Acupuncture
treatments if they are not performed by a licensed
physician |
Health
programs offered by resort hotels, health
clubs |
Air
conditioners, humidifiers, dehumidifiers or air cleaners |
Illegal
operations, treatment or drugs |
Antiseptic
diaper service Scales for weighing food |
(Non
prescription) birth control devices |
Payments
to a municipality where the municipality employed
a doctor to provide medical services to the residents
of the municipality |
Special
food or beverages are not a deductible expense for
tax purposes. However, if said food or beverages
are taken to alleviate or treat an illness and not
nutritional, they may be allowed. Such claims must
be accompanied by a letter from a medical doctor |
Maternity
clothes Wigs-unless made to order for individuals
who have suffered abnormal hair loss owing to disease,
medical treatment, or accident |
Tooth
paste |
Medical
expenses for which you are reimbursed or are entitled
to be reimbursed from other plans |
IMPORTANT - Provincial Health
Care Premiums ARE NOT eligible expenditures |
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PERSONAL INCOME TAX METHOD |
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Taxable
Income |
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$60,000 |
$100,000 |
$120,000 |
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| Medical Expenses* |
4,750 |
4,750 |
4,750 |
| Deduct 3% of Taxable income to a max of
$1,770** |
1,770 |
1,770 |
1,770 |
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| Eligible Medical Expenses |
2,980 |
2,980 |
2,980 |
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| Medical Tax Credits |
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| Federal 16% |
477 |
477 |
477 |
| Ontario 6.05% |
194 |
194 |
194 |
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| Tax Credit |
671 |
671 |
671 |
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| Net After Tax Cost |
4,080 |
4,080 |
4,080 |
| ** based on 2003 ITA |
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MCGILL PHSP METHOD |
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Taxable
Income |
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$60,000 |
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$100,000 |
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$120,000 |
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| Eligible Medical Expenses* |
4,750 |
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4,750 |
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4,750 |
| Tax @ marginal rate |
39.00% |
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44.00% |
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46.00% |
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| Medical Tax Credits |
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| Tax Credits |
1,853 |
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2,090 |
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2,185 |
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| Net After Tax Cost |
2,898 |
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2,660 |
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2,565 |
| McGill PHSP ADVANTAGE |
1,182 |
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1,420 |
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1,515 |
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McGill Health Services and Comprehensive Health working for the self-employed and small business
person. |
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