Tax Tips for People with Diabetes

If you are like me, you aren’t overly excited by tax time. The thought of paying in more money is so depressing that you are probably digging through every receipt trying to figure out how you can write off that last Ice-cap from Tim Hortons as a diabetes-related expense. Here are a few tax tips that you may have overlooked.

Diabetes supplies

Keep all of the receipts for your diabetes supplies such as:

• insulin
• syringes
• test strips
• ketone strips
• alcohol wipes
• medical tape
• Glucagon kit
• pump supplies including the insulin pump, tape, infusion sets, reservoirs, batteries, and mastisol 
• Continuous Glucose Monitor, transmitters, and batteries

If you have paid out of pocket for these items or a co-pay after insurance, make sure that you have a prescription for them.

Service Animals

If you have a certified Diabetes Alert Dog in Canada, you may be eligible to deduct the cost of their purchase, training, food, and veterinarian bills.

According to the Tax Slayer website, this is also the case in the US.

Travel

You can claim the cost of travel to medical appointments.

In Canada, you must travel at least 40 km one way to get to your appointment. Make sure that you have a signed letter from the office before you leave stating that you have been there. You will then be able to deduct the cost of public transportation or vehicle expenses.

If you must travel over 80 km one way, you will also be able to claim the cost of meals. You are allowed up to $17 per meal up to a maximum of $51 per day. You can learn more here.

Finally, you can also claim your accommodations and parking fees for travel over 80km. Again, make sure that you have a letter stating that you have traveled for medical appointments.

In the US, you can deduct 23 cents per mile in lieu of gas and oil, plus any parking fees and tolls for travel to medical appointments. If you take a taxi, bus, train, airplane or ambulance you can deduct the actual expense. You can deduct the cost of any accommodations, but unlike Canada, you cannot deduct the cost of meals.

In the US, these expenses must exceed 10% of your gross annual income as of 2019. For those living in Canada, medical expenses must be above the lesser of $2,208 or 3 percent of your net income.

HSA/FSA

If you live in the USA, you can also save by contributing to a Health Savings Account (HSA) or a Flexible Spending Account (FSA).

These accounts are managed by financial institutions and accessed in the same way as you access your chequing account.

Both a Health Savings Account and a Flexible Spending Account are made up of tax-deductible contributions with pre-set contribution limits. Contributions can be set up through your employer. Both accounts also share the same list of “qualified expenses”.

The difference, however, is in who is eligible. Anyone can contribute to an FSA but only those with a high deductible ($1,350 or more for an individual or $2,700 or more for a family in 2018) health plan are eligible for the Health Savings Accounts. 

The maximum contribution to an HSA is $3,450 for an individual and $6,900 for families.  The maximum contribution into an FSA is $2,650. (at the time of this writing)

Disability Tax Credit

In Canada, we do not have Health Savings Accounts. We do however have a Registered Disability Savings Plan. To access this plan and the associated government grants, you must first apply for and be approved for the Disability Tax Credit (DTC).

The DTC is a non-refundable tax credit that reduces your taxable income. To qualify, you must be insulin-dependent and spend over 14 hours per week on your care.

See if you might qualify for the DTC below.