Tax Deduction Example

Did you know filing medical expenses on personal tax returns only provides a small 3% tax credit?

A Private Health Services Plan (PHSP) allows business owners to tax-deduct 100% of their dental and healthcare expenses as a business expense.

EXAMPLE: Net income of $50,000 per year with family medical expenses of $1600. Based on a combined Federal and Provincial Income Tax rate of 25%.

Personal Tax Return Paid Personally Private Health Services Plan Paid Corporately
Dental & Healthcare Expense $1600 Dental & Healthcare Expense $1600
(3% of net income) Deduct - $1500 Admin Fee (10%) + $160
Expense available for credit - $100 Tax-deductible total = $1760
Non-refundable Tax Credit = $25 Tax Deduction = $1760
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