The ultimate family business tax break in Canada

By: Updated: July 13, 2017



Buried deep inside Canada's Income Tax Act is the ultimate family business tax break . This tax break has been used by thousands of in-the-know Canadian family business owners for over 20 years.

Let's take a look at what you've been missing.

Reduce your taxes with the HSA

The HSA or better known as Health Spending Account, is a family business tax break available to Candian business owners and their families.  Based on section 248 (1) of the Income Tax Act and CRA Bulletin IT 339R2, family business owners have been taking advantage of this tax break for over two decades.

Instead of paying for medical expenses personally, as an after tax expense, family business owners can pay for medical expenses through their business, using before tax dollars through a Health Spending Account.

By converting your expenses from personal to business, you effectively reduce the amount of tax you pay on the cost of your medical bills.  If you have a personal tax rate of 40% and spend about $3,000 a year on your family's medical expenses, your business will save about $2,000 in taxes.

Who Qualifies?

You qualify for a Health Spending Account if you meet the following criteria:

  1. Operate a business in Canada
  2. Have medical expenses
  3. Pay income taxes

What expenses can I claim?

You can claim 100% of a wide variety of medical expenses ranging from orthodontics, laser eye surgery, and prescription drugs. Find out if your upcoming family medical expense are going to be eligible for your HSA in Canada. 

How do I set up a HSA?

The first step would be to research providers as a Health Spending Account should be administered by a third party administrator.  Don't just shop on price. Look for transparency, reputation, and infrastructure. Next, make sure you understand the guidelines. Speaking to your accountant is a good idea for clarification.

Are you a family business owner in Canada? Find out why Health Spending Accounts are such an attractive option for your business.

Download Beginner's HSA Guide for an incorporated individual

Write off 100% of your medical expenses

Are you an incorporated business owner with no employees? Learn how to use a Health Spending Account to pay for your medical expenses through your corporation: 

Download the HSA Guide for Incorporated Individuals

Do you own a corporation with employees? Discover a tax deductible health and dental plan that has no premiums:

Download the HSA Guide for a Business with Staff

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