Track Monthly Medical Expenses Without Leaving Money On The Table
Come Income Tax season the last thing you want to be doing is scrambling to find and calculate all of your monthly medical expenses, so why not track them.
Claiming medical expenses on your income tax return is a big deal especially if you’ve paid for them out-of-pocket.
That means if you’ve submitted a health expense to your employee benefits program you cannot claim that amount.
All you can claim is the amount that they did not cover. Easy enough, right?
As of 2018, you can claim the lesser of $2302 or 3% of your net income on lines 330 and 331 on your income tax return.
So, what’s all the fuss about?
Both Mrs. CBB and I are getting older and our monthly medical expenses have been climbing.
There’s only so much my employer will reimburse us for so it’s a priority to make sure that we keep all of our receipts.
Monthly Medical Expenses Claimants
On your income tax return, you can claim for yourself, your spouse/common-law, children under 18 and or born before 2001.
You can also claim dependants that were under your care such as;
- your or your spouse’s or common-law partner’s children born in 2000 or earlier, or grandchildren
- your or your spouse’s or common-law partner’s parents, grandparents, brothers, sisters, uncles, aunts, nephews, or nieces who were residents of Canada at any time in the year – Revenu Canada
Anything you claim must be for a 12-month period ending in the year you are claiming for.
For example; July 2018- June 2019.
How We Used To Track Monthly Medical Expenses
Typically, we keep all of our prescription receipts in a folder in my office with the rest of our budgeting tools such as our budget binder.
That was the easy part but when it came to all of our other expenses we found we were struggling to find them come income tax season.
Claiming out-of-pocket monthly medical expenses can make a big difference for your income tax return even if they were not paid in Canada.
It got to the point where income tax time was not a fun time for us especially when we were not organized.
Honestly, we were lazy and would grow anxious trying to locate everything we needed in hopes we didn’t miss anything.
Don’t be like us.
The last thing you want to do is forget important expenses that you paid for that can be included on your income tax return.
How We Track Our Monthly Medical Expenses in 2020
So, we have another year of wasting time locating all of our monthly medical expenses for 2019.
We’ve had enough so I created a Monthly Medical Expenses Tracking Sheet for our Budget Binder.
I bet you were wondering what took me so long.
Well, I didn’t realize just how much work we were putting into the end of year income tax preparation until now.
With my wife having a life-long medical condition and now potentially our son we’ve got big expenses coming our way in 2020.
I mean BIG, into the thousands of dollars that no employer or insurance company will cover.
One program he will be participating in will cost us $7500 plus taxes for the year.
The hard part is that we don’t know if he will need one year of assistance or two.
We were told by his occupational therapist to pay for 6 months of the training to see if it makes a difference.
From there if he needs further assistance then we could move forward and pay for the rest of the year.
The idea is if we pay for the full year and he doesn’t need it then we paid for nothing.
Of course, they probably won’t tell us that.
This means I will have to take a chunk of money from our savings account to cover these costs for him.
Increased Prescription Costs
We’ve also had to pay for glasses above and beyond what my employer covers to the tune of $200.
He chose Raybans so of course, they were the most expensive glasses which we bought two pairs, one for home and school.
For Mrs. CBB her expenses come in the form of medicinal marijuana oils and synthetic both of which come with a big price-tag.
The synthetic spray costs us $38 a month where the oil is $125 a 5ml bottle at max 5 bottles a month.
Trust me she tries NOT to use that much because the cost is far too much so she supplements with synthetic spray.
Monthly Medical Expenses Tracking Sheet
We’re perfectly fine doing anything we can for him but we must track these monthly medical expenses.
By creating the monthly medical expenses tracking sheet we can enter the data we need and total it at the end of the month.
We have a folder with 12 envelopes that will contain our receipts and they are labelled by month.
You can use anything that works for your family to store your receipts so you don’t have to follow what we do.
I printed 12 copies of our monthly medical expenses tracking sheet (you can save to your computer as well) and put them in our budget binder.
Each month when Mrs. CBB adds up all of our monthly receipts she will enter the date for our health costs.
I can’t tell you how happy I am that I finally got both of us on board to do this.
Why? There are four reasons why a monthly medical tracking sheet will improve our income tax return experience.
Let’s go over what Mrs. CBB and I discussed.
At the beginning of January, we get the income tax sweats because we know we have lots to do.
With having Canadian Budget Binder as my business I have business expenses that I need to be meticulous with.
We felt that by creating this monthly medical tracking list and having our receipts organized by month it would lower our stress levels.
Income tax time can be overwhelming for lots of people especially if you have quite a few expenses you can claim.
This was a big one and with the addition of the monthly medical tracking sheet we won’t have to go through our monthly budget receipts searching.
That’s what we did.
When we calculate our monthly budget all of the receipts that we have in our folder go into a Ziploc bag and labelled with the month.
At tax time we would have to look through them to find what we needed.
It was a disaster. See, we’re not your perfect budgeting couple, we’re human and learn from our mistakes.
I think that’s always the misconception that some people have is that behind the computer life is all roses.
Well, it’s not and this blog was created from our mistakes and successes and life is about learning.
Becoming organized is like having a clean desk where everything has its place.
I need to take tips from myself.
If you remember early this month I posted about how we lost our running totals from our monthly budget.
Well, I forgot to back up the budget so we lost that important information.
I won’t be making that mistake again this year but it did scare me a bit.
What if the back-up fails?
Perhaps I’m being a bit paranoid but I’ve always been a paper and pencil kind of guy which is why I love printables.
Keeping the running totals of our monthly medical expenses helps us to know what we are paying out at the end of the month.
The problem with medical expenses is that you don’t know what they will cost you nor do you know what will happen in the future.
This is what leads us to our projected expenses and our monthly budget because we still need to budget for health costs.
As you will notice our projected expenses for our health expenses will go up in 2020 as mentioned above.
This is because we have some indication of what may be happening for us throughout the year.
We also know the average costs of Mrs. CBB’s prescriptions through previous income tax returns.
The great thing about tracking our monthly medical expenses in 2020 is that we will have better data to base our 2021 projected expenses.
When you can come as close as possible to your future expenses it won’t be so hard when further expenses are added.
Using our emergency savings to pay for healthcare costs is something we want to avoid since we have a budget category for this expense.
The idea is the tighter you keep your budget and I don’t mean financially, but from an organizational point of view the easier the process will be.
Come income tax time you won’t break out in sweats because you’ll have all the data you need at your fingertips.
Now, that makes for a stress-free income-tax season.
You can download and print the free Monthly Medical Tracking form from my Free Downloads and Resources Page.
Discussion: How do you track your monthly medical expenses for income tax purposes?
Leave me your comments below and I’ll be sure to respond.