True Financial

  • Home
  • My Prosperity Login
  • About
    • John Duncan – Fee Only financial planner
    • Fee for Service Financial Planning
    • Our Ideal Client
  • Advice
    • Benefits of Financial Planning
    • Cash Flow Management
    • Superannuation
      • What is Superannuation
      • What is a SMSF
      • Contributions Limits
    • Investments
      • Investment Philosophy
    • Insurance Advice
      • Insure The Stay-at-Home Parent
      • Income Protection Insurance
    • Retirement Planning
    • Estate Planning Advice
    • Business Advice
  • Articles
  • Video Library
  • Testimonials
You are here: Home / General / Medical Tax offset

March 4, 2011 by John Duncan

Medical Tax offset

Did you know that you can claim your medical tax offset for medical expenses paid for or on behalf of dependants in your tax return? A medical tax offset can be claimed for you, your spouse, your children and even possibly an invalid relative.

The medical tax offset is calculated based on your net out of pocket expenses. That is your total medical expenses less any refunds that either yourself or your dependants have received or are entitled to receive. This includes refunds from both Medicare and your private health insurer.

You can claim the following for your medical tax offset:

  • illness or operation expenses paid to legally qualified doctors, nurses or chemists and private or public hospitals.
  • Dentist, orthodontist or registered dental mechanic expenses
  • Optician or optometrist expenses, including the cost of prescription spectacles or contact lenses
  • Expenses for a carer who looks after a person who is blind or permanently confined to a bed or wheelchair
  • Therapeutic treatment expenses under the direction of a doctor
  • Expenses for medical aids prescribed by a doctor
  • Expenses for artificial limbs or eyes and hearing aids
  • Expenses for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy)
  • Expenses for laser eye surgery, and
  • Expenses for treatment under an in-vitro fertilisation program.

You may also be able to claim the medical tax offset for payments made to nursing homes or hostels (not retirement homes) if the payments were:

  • made to an approved care provider, and
  • for personal or nursing care, not just for accommodation.

Expenses which do not qualify for the medical tax offset include payments made for:

  • cosmetic operations for which a Medicare benefit is not payable
  • dental services or treatments that are solely cosmetic
  • therapeutic treatment where the patient is not formally referred by a doctor – a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment
  • chemist-type items, such as tablets for pain relief, purchased in retail outlets or health food stores
  • inoculations for overseas travel
  • non-prescribed vitamins or health foods
  • travel or accommodation expenses associated with medical treatment
  • contributions to a private health insurer
  • purchases from a chemist that are not related to an illness or operation
  • life insurance medical examinations
  • ambulance charges and subscriptions, and
  • funeral expenses.

If you are eligible to claim the medical tax offset you will need evidence to provide to your accountant at tax time.

  • Keep all receipts and details of refunds related to medical expenses for yourself and any dependant you may be claiming for.
  • If the receipt is on fading paper, take a copy of the receipt or scan it and also keep notes on the back of it with notes of the treatment received. This will make it easy for the accountant to ensure what you are claiming is eligible.

You can also ask for an itemised statement from:

  • Medicare (your accountant can also assess this on your behalf)
  • your private health insurer
  • chemists where you had prescriptions filled. (A good idea is to only use the one pharmacy as they are able to give you a print out at the end of the financial year)

Some of the items shown on these statements may not qualify as medical expenses for the purpose of claiming the medical tax offset. You will need to exclude these items when calculating your allowable medical expenses.

Strategies to consider to MAXIMISE the medical tax offset:

If you are in a position to bring forward further medical expenses (such as dental work or elective surgery) by maximising the medical expenses in one year instead of spreading over two years you may be able to maximise your benefit, especially if your usual medical expenses are below the threshold. :

The medical tax offset threshold for 2010-11 is $1500 and $2000 in 2010-11

How much difference will the tax offset make?

Karen and her husband David have 3 children. In the 2010-2011 financial year, they collect their receipts and work out they have spent $3000 in eligible medical expenses. They also calculate they have received $500 back in rebates already. Based on these figures, they are eligible for a $200 medical tax rebate.

Worksheet
Add up all your allowable medical expenses. $3000 (a)
Add up all the refunds of these expenses which you or any other person has received or are entitled to receive. $500 (b)
Take (b) away from (a). This is your net medical expenses amount. $2500 (c)
Take $1,500 away from (c). $1000 (d)
If the amount at (d) is $0 or less, you cannot claim a tax offset.
Divide (d) by 5 (to get 20%). The amount at (e) is your medical expenses tax offset. $200 (e)

For more information, please refer to the ATO website.

Filed Under: General, Tax Tips

Keep up to Date

Powered by VMA-Emailer

Meet John Duncan

John Duncan - Financial Planner

Director for True Financial - John Duncan - Fee Only financial planner To receive the best financial planning advice you need the best financial planner. John Duncan is certainly in that category. John is a financial planner who is unique in not only his high level of knowledge and experience in financial planning but also in the amount of areas that John advises in. A Financial Planner with a strong Education background John is a Certified … Read More

Post Categories

  • Budget (5)
  • General (26)
  • Insurance (2)
  • Investment (14)
  • Property (5)
  • Superannuation (4)
  • Tax Tips (7)
  • Uncategorized (44)

Like us on Facebook

Recent Posts

  • Federal Budget 2022/23
  • The Historic Market Crash
  • How Much Do I Need To Retire?
  • 2021 Q3 September Quarter Review
  • The Blind Leading the Blind

Privacy Statement

See our Privacy Statement here

Keep up to Date

Powered by VMA-Emailer

True Financial is an Authorised Representative No. 428771 and Credit Representative No. 428873 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253

Contact Information: Address: 23 Errard St Kelvin Grove 4059 - Phone: (07) 3169 2570 - Email: admin@truefinancial.com.au - Web Design & SEO by: Visual Marketing

Information provided on this website is general in nature and does not constitute financial advice. True Financial Pty Ltd will endeavour to update the website as needed. However, information can change without notice and True Financial Pty Ltd does not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time. Every effort has been made to ensure that the information provided is accurate. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a financial planner to take into account your particular investment objectives, financial situation and individual needs.True Financial Pty Ltd does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, True Financial Pty Ltd, its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided on this website is owned by True Financial Pty Ltd. You may not alter or modify this information in any way, including the removal of this copyright notice.