Turning Personal Costs into Corporate Tax Deductions

Why pay for healthcare costs out of your own pocket when you can have your corporation pay these expenses?

Most small business owners are challenged with how to pay for drug, dental, and extended healthcare costs. If you do not have access to a group plan through your spouse, you will have to pay for these expenses out of pocket using after tax income. This is where a Health Spending Account (HSA) is of great value to you and your family. You will no longer have to pay for these expenses personally; all you need to do is to set up an HSA, and any contributions by your business are 100% tax deductible to your business, while all eligible medical, drug, dental and extended healthcare expenses are reimbursed to you and your family tax-free.

HSAs are less expensive than group insurance policies. With group insurance, the costs are based on the previous “experience” in terms of claims filed, plus the insurance company’s fees and profits.

What is a Health Spending Account?

 An HSA is a self-insured Employee Life & Health Trust (ELHT) set-up by the employer (corporation) as a benefit for their employees. A Health Spending Account (HSA) provides expanded medical and dental coverage to professionals and business owners, their families and certain employees.

Covered Expenses:  Expenses that are covered include both health and dental care expenses;

below is a sub-list of some of the other expenses that are covered:

For a more detailed list you can visit the Canada Revenue Agency (CRA) website by clicking on the link: CRA list of covered expenses