Personal Finance

Help with tax credits

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  • Feb 25th, 2018 4:36 pm
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[OP]
Jr. Member
Oct 29, 2017
115 posts
14 upvotes

Help with tax credits

Two questions about tax credits:

1. Using round numbers, if I make $50,000 annually and have $10,000 in out of pocket medical expenses due to no insurance, how much can I expect in terms of a refund. For simplicity, let's assume there are no other deductions such as TFSA etc.

2. Can unused medical expenses be carried forward?

Thank you
6 replies
Deal Fanatic
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Nov 19, 2004
8950 posts
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Cambridge, ON
50,000 x 3% = 1500. Anything above that can go towards a tax credit. So 7500 at the base rate = 1125 federal and ~375 provincial (depending on your province) in credits.

You can't carry them forward, but you can pick any 12 month period as long as it ends in the tax year. So for example you could claim February 2016 to January 2017 on your 2017 taxes.
Of course, that assumes you haven't claimed them already or been reimbursed.
[OP]
Jr. Member
Oct 29, 2017
115 posts
14 upvotes
don242 wrote: So 7500 at the base rate = 1125 federal and ~375 provincial (depending on your province) in credits.
Thank you don242.

When you mention "at the base rate", what does that mean and how do I determine what is my base rate? Are you referring to your net tax rate?
Deal Fanatic
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Nov 19, 2004
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Cambridge, ON
timc00k wrote: Thank you don242.

When you mention "at the base rate", what does that mean and how do I determine what is my base rate? Are you referring to your net tax rate?
Tax credits are applied at the lowest tax bracket amount for everyone. So for Federal that is 15%, for provincial it is around 5% (varies by province). So whether you make a lot and are in a higher marginal tax bracket, or less and in a lower tax bracket, it doesn't matter since the tax credit is always applied at the lowest tax bracket amount for all. By base rate, I just meant this lower tax bracket rate.
Deal Addict
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Aug 7, 2010
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don242 wrote: 50,000 x 3% = 1500. Anything above that can go towards a tax credit. So 7500 at the base rate = 1125 federal and ~375 provincial (depending on your province) in credits.
Shouldn't it be 8500 instead of 7500?
Deal Fanatic
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Nov 19, 2004
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Cambridge, ON
komodor wrote: Shouldn't it be 8500 instead of 7500?
Yep. Shows how great my brain functions Sunday morning!
Member
May 28, 2012
436 posts
383 upvotes
ONT
timc00k wrote: Two questions about tax credits:

1. Using round numbers, if I make $50,000 annually and have $10,000 in out of pocket medical expenses due to no insurance, how much can I expect in terms of a refund. For simplicity, let's assume there are no other deductions such as TFSA etc.
Thank you
Small point but I don't think TFSA contributions would be deductible. RRSP yes, TFSA no.

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