How can you save $100’s and maybe $1,000’s in taxes in one simple step with a Private Health Services Plan?
Are you an employee of your own company and do you have significant medical and dental expenses each year of $2,000 or more not covered by a health plan? Then creating a “Private Health Services Plan” (PHSP) as soon as possible could save you big dollars.
Although individuals are allowed to claim medical and dental expenses for themselves and their families on their personal tax return the value of those expenses is somewhat limited. The amount of the expenses must exceed $2,237, or 3% of your net income, whichever is lower. As well, all expenses claimed receive a 15% credit against federal tax paid and a 10% credit against provincial tax paid (in Alberta) for a total credit of 25%.
Consider a Private Health Services Plan (PHSP) which is 100% deductible against your businesses income from the very first dollar. If you are in the highest tax bracket then the PHSP will generate well over $1,000 in tax savings every year just on the first $2,237 alone plus 23% savings on anything over that. The cost of administering one of these plans can be as low as $10 per claim to a maximum of $250 depending on the administrator that looks after your plan.
We have a number of administrators that we can refer you to and would be happy to talk to you further about how to set up a plan and who to contact so that you can get started as soon as possible. Please contact our office at 780-466-6204 to start saving more taxes today.
There is a good website , the PHSP Calculator, that may help you decide if starting a PHSP is worth doing.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to David Wickenberg of KWB Chartered Professional Accountants for providing this content.