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
Pay Personally
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…
…massage therapy
…chiropractor
…dental
…prescriptions
…vision
…gym membership
…travel & major medical
…the list goes on
Whatever the medical expense is, you and your family are covered.
Conclusion
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?
Exactly.
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?
