Maximizing Your Health and Savings with the $125 Deduction

Maximizing Your Health and Savings with the $125 Deduction

When it comes to staying healthy and saving money, there are few things that go hand in hand. But did you know that taking advantage of the $125 deduction for health and wellness expenses can help you do both? In this article, we’ll explore what the $125 deduction is, what expenses are covered, and how you can make the most of this tax benefit to maximize your health and savings.

What is the $125 Deduction?

The $125 deduction is a tax benefit that allows most Canadians to claim up to $125 in eligible health and wellness expenses on their tax return each year. This deduction was introduced in 2011 to help Canadians offset the cost of staying healthy and taking care of themselves.

What Expenses are Covered?

A wide range of expenses are eligible for the $125 deduction, including:

– Fitness and exercise classes
– Gym memberships
– Sports equipment and gear
– Prescription glasses and contacts
– Hearing aids and batteries
– Physiotherapy and massage therapy
– Mental health therapy
– Acupuncture and chiropractic services

These expenses can help you maintain your physical and mental health and wellbeing, and the $125 deduction is a great way to make them more affordable.

How to Make the Most of the $125 Deduction

To make the most of the $125 deduction, there are a few things you can do. First, keep track of all eligible expenses throughout the year, so you have a clear record when it comes time to file your taxes. You can do this by saving receipts and invoices, or by using a health and wellness expense tracking tool.

Second, consider combining expenses with family members. If you have a spouse or children who also use eligible services or products, you can pool your expenses together, which can help you reach the $125 maximum more easily.

Finally, be aware of any changes to the eligibility criteria. The Canada Revenue Agency (CRA) updates the eligible expenses list regularly, so it’s important to stay up to date to ensure you are claiming all the deductions you are entitled to.

Real-Life Examples

Here are a few examples of how the $125 deduction can translate into real savings:

– Sarah spends $80 per month on a gym membership. By claiming this as an eligible expense, she can save $9.60 on her taxes each year.
– John has a prescription for glasses that costs $250. By claiming this expense, he can save $30 on his taxes.
– Emily sees a physiotherapist twice a month at a cost of $80 per session. By claiming these expenses, she can save $96 on her taxes each year.

Conclusion

The $125 deduction is a great way to help Canadians stay healthy and save money. By taking advantage of this tax benefit and claiming eligible health and wellness expenses, you can ensure that you are taking care of yourself and your finances. So start keeping track of your eligible expenses today, and make the most of this valuable tax benefit!