Save on Tax with Medical Expenses
Do you pay for any medical expenses out of pocket?
If so, here is how you can save $4,002 in tax this year.
Our client, let’s call her Sandy (name changed), had to pay for her daughter’s braces this year, which cost $7,500.
With group benefits, that would never be covered 100%. In fact, her plan doesn’t even offer orthodontics.
There are two ways Sandy could have paid for her daughter’s braces:
- Pay personally
- Pay via your corporation
With a marginal tax rate of 46%, that means that Sandy had to take out approximately $12,500 of income in order to net $7,500.
Total cost of braces: $12,500
Pay via Corporation
By using a Health Spending Account in your corporation, Sandy only has to pay $998 of administration fees & tax to cover the full $7,500 cost of the braces.
Total Cost of braces = $8,498
Outcome? Save $4,002 by using your corporation
The math is clear. $12,500 – $8,498 = $4,002
What medical expenses are covered?
So many dentists pay for medical expenses out of pocket each year.
If you’re one of them, PLEASE STOP and setup a call with us.
You’re wasting money that is going to tax when it should stay in your pocket.
Whether you are paying for…
…travel & major medical
…the list goes on
Whatever the medical expense is, you and your family are covered.
Most dentists we’ve dealt with spend at least $1,000 to $2,000 per year on medical.
That is about $500 to $1000 in extra tax that you are WASTING that could be used for other things.
Think about it.
$1,000 savings over 10 years is $10,000 wasted.
What could you do with another $10,000 in your pocket?
In Sandy’s case, that’s tuition paid when her daughter starts going to university/college.
I’d love to setup a time to discuss some of the ways we can make that happen for you as well.
Is a few minutes of your time worth 4,002 in tax savings to you?