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 |