Examples of PHSP TAX SAVINGs

These examples below provide an estimate of a client's potential tax savings in the scenarios indicated for typical ranges of income and family medical expenses. It is not a detailed calculation, nor does it take into account all factors that determine income taxes payable. For a detailed personal tax estimate, clients should consult their tax advisor.

 
FAMILY MEDICAL EXPENSES
SELF-EMPLOYED TAXABLE INCOME
2017 MARGINAL TAX RATE (ONTARIO) 		$  2,750
$48,000
29.65%
 
Medical Tax Credit  
Total Medical Expenses $  2,750
No tax relief on 3% of taxable income
Amount eligible for tax credit		 $(1,440)
$  1,310
Tax Credit at 20.05%
(uses lowest tax rate) 		$     263
 
You Save $    263
Vital Health Savings Plan
Total Medical Expenses
Fees (10%) & premium tax (2%)
Total VHSP Premiums*
(fully deductible against business income)		 $2,750
$   336
$3,086
Tax savings at 29.65%
(uses your highest tax rate)
Less: Cost of fees and taxes		 $   915

$   -336
You Save $   579

 More after-tax $$ in your pocket totalling $317

 
FAMILY MEDICAL EXPENSES
SELF-EMPLOYED TAXABLE INCOME
2017 MARGINAL TAX RATE (ONTARIO) 		$  3,800
$75,000
31.48%
 
Medical Tax Credit  
Total Medical Expenses $  3,800
No tax relief on 3% of taxable income
Amount eligible for tax credit		 $(2,237)
$  1,563
Tax Credit at 20.05%
(uses lowest tax rate) 		$     313
 
You Save $    313
Vital Health Savings Plan
Total Medical Expenses
Fees (10%) & premium tax (2%)
Total VHSP Premiums*
(fully deductible against business income)		 $3,800
$   464
$4,264
Tax savings at 31.48%
(uses your highest tax rate)
Less: Cost of fees and taxes		 $1,342

$   -464
You Save $  879

More after-tax $$ in your pocket totalling $565

 
FAMILY MEDICAL EXPENSES
SELF-EMPLOYED TAXABLE INCOME
2017 MARGINAL TAX RATE (ONTARIO) 		$  4,400
$96,000
43.41%
 
Medical Tax Credit  
Total Medical Expenses $  4,400
No tax relief on 3% of taxable income
Amount eligible for tax credit		 $(2,237)
$  2,163
Tax Credit at 20.05%
(uses lowest tax rate) 		$     434
 
You Save $    434
Vital Health Savings Plan
Total Medical Expenses
Fees (10%) & premium tax (2%)
Total VHSP Premiums*
(fully deductible against business income)		 $4,400
$   537
$4,937
Tax savings at 43.41%
(uses your highest tax rate)
Less: Cost of fees and taxes		 $2,143

$   -537
You Save $ 1606

More after-tax $$ in your pocket totalling $1,173

 *100% deductible expense against self-employed E&OE business income, up to Family Limit

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