That means if you had 10,000 in medical bills. The benefit of this was to allow deposits and withdrawals by each of the joint account holders without requiring a power of attorney to do so, or requiring co-signatures. So if your adjusted gross income is 40,000, anything beyond the first 3,000 of medical bills or 7.5 of your AGI could be deductible. Because of the mother-in-law’s health conditions, her financial institution suggested that a joint account be opened under the names of the taxpayer’s wife and mother-in-law. The complicating factor in this case, and perhaps the reason why the CRA chose not to follow its longstanding administrative practice of allowing a spouse to claim the METC for medical expenses paid by the other spouse, may have to do with the specific unique facts of this case.īy way of background, a decision was made in 2010 to centralize all the taxpayer’s mother-in-law’s income and banking operations in one single account. The CRA said these expenses “were paid from a bank account over which the (taxpayer) had no authority, ownership or other right.” The CRA disagreed, pointing to the specific words in the Income Tax Act that require the taxpayer, himself, to have paid the expenses claimed for a relative. The taxpayer maintained that it shouldn’t matter whether the expense was paid by him or his spouse. The taxpayer argued that since his spouse had authority over the joint bank account, any medical expenses paid by his spouse from that account should meet the definition of “paid by the individual” for purposes of claiming the METC. Nearly all the medical expenses of the taxpayer’s mother-in-law were paid by the taxpayer’s spouse from a joint bank account held by his spouse and his spouse’s mother. If you are, youll claim them when you file your annual Indiana income tax return on Form IT-40 or IT-40PNR. First, check the list below to see if youre eligible to claim any of the deductions. Your child that you do not claim as a dependent because of the rules for children of divorced or separated parents. Filing My Taxes Indiana Deductions from Income Indiana deductions are used to reduce the amount of taxable income. Photo by Adrian Wyld/The Canadian PressĪt the trial, both the taxpayer and the CRA agreed that all the necessary conditions to allow the taxpayer’s METC were satisfied save one: whether the taxpayer actually paid the medical expenses himself. You can include in your deduction for Medical and Dental Expenses any qualifying medical and dental bills you paid for: Yourself and your spouse. For tax year 2022, a married couple with no children itemizes their deductions on their federal income tax return and claims 50,000 in medical expenses. The taxpayer objected and took the matter to Tax Court.Ī sign outside the Canada Revenue Agency. If your unreimbursed medical expenses exceed your standard tax deduction, youll want to deduct those expenses on your tax return by claiming an itemized. It later allowed $607 of those expenses and denied the balance. In late 2019, the CRA reassessed the taxpayer’s 2018 tax return, disallowing all the medical expenses he had claimed for his mother-in-law. This advertisement has not loaded yet, but your article continues below.
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