A Health Spending Account (HSA) is a platform for self-employed people, incorporated companies and business owners to cost effectively pay for medical/dental expenses that are covered under the Canadian Income Tax Act. Instead of paying for expenses personally (with after tax dollars), they are covered through the company or sole proprietorship. The advantage? It’s tax free to the individual and their family!
How does this save you money?
There are 2 options for paying for medical expenses:
Personal Expense: You have no insurance plan and pay for your medical expenses out of pocket
Business Expense: You Pay for your medical expenses through your corporation with a Health Spending Account.
Eligible Expenses Include:
- Vision Card
- Medical Practitioners
- Dental Services
- Hospitals and Other Facilities
- Devices, Supplies and Equipment
- Diagnostic Procedures
- Rehabilitative therapy
This list is subject to any changes that are made to the list of items qualifying as medical expenses under the Income Tax Act (Canada). For more information on eligible expenses, go to www.cra-arc.gc.ca and enter Medical Expense Tax Credits in the search window. Go to the most current version of publication #IT519 (Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction).