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Using a fully insured plan Out of pocket Private Health Services Plan (PHSP)

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?.

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Using a fully insured plan Out of pocket Private Health Services Plan (PHSP)

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

  2. 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?

  3. CRA 3% Rule …. Line 330 • Your total expenses have to be more than either 3% of your net income (line 236) or $2,109, whichever is less. • The calculation used takes three elements into account. • Actual medical expense, less • 3% of income, or • $2,109 Which ever is less

  4. $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

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