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Tax Tips: Claim back your dental expenses

Now that this year’s tax time is getting close, it’s a good opportunity to think about your financial activities to date. For most people, this will involve arranging their personal tax refund, but did you know you could claim back some of your dental expenses as well?

However this scheme is currently being phased out so it is an important time to read up on the latest information, and more importantly, speaking to your accountant or financial advisor to determine the extent the medical taxation rebate could apply to your personal circumstance, as this article is meant for general information only.

Net Medical Expenses Tax Offset Phase Out

On 14 May 2013, the Government announced in the 2013-14 Budget that it will phase out the Net Medical Expenses Tax Offset. Currently, this offset now only applies to taxpayers who received the offset in the 2012/2013 financial year, and similarly will only be eligible for the 2014/2015 financial year if they receive this offset in the current 2013/2014 financial year. The exception to this rule are tax payers who have out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019.

Depending on how much you spent on dental treatments during the previous tax year, you may be eligible to claim a tax offset from the Australian Taxation Office (ATO). With this in mind, there’s even more reason for you to look after your oral health by getting the treatment you need.

How does it work?

If you had net medical expenses totalling over $2,120 in the 2013-14 period, you may be eligible for this tax offset. This is the amount left over after any refunds from Medicare or your private health insurer.

The category of medical expenses doesn’t include any contributions you made towards your private health insurer or any travel and accommodation costs associated with medical treatment you had during the year. Inoculations for the purpose of overseas travel are also excluded.

What these medical expenses do include is payments made to dentists, orthodontists or registered dental mechanics. You may also claim back any payments you made towards an optician or optometrist, a therapeutic treatment carried out under the direction of a doctor, medical aids prescribed by your doctor, artificial limbs or eyes, hearing aids and other select categories of medical expense.

However, it’s important to note that any purely cosmetic dental services or treatments do not qualify for this tax offset.

You can claim these expenses for yourself, your spouse and certain other parties including children under the age of 21 and students under the age of 25 who you maintained.

Depending on your family status and adjusted taxable income (ATI) threshold, you may be able to claim 10 per cent of the net medical expenses over $5,000 or 20 per cent of the net medical expenses over $2,120. The ATI Threshold is currently set at $84,000 for individuals or $168,000 for families, with those under the thresholds eligible for 20% of net medical expenses over $2,120 or those over the thresholds eligible for 10% of net medical expenses over $5000.

To apply for this tax offset, you will need to have all the details of the dental procedures you had. You will also need information regarding the refunds you or other relevant people are entitled to receive under Medicare or private health insurance.

You can ask Medicare, your private insurer or the chemist who filled your prescriptions to provide a statement showing the medical expenses you paid during 2013-14. Once you have the exact amount, the ATO will work out how much you can claim back based on your ATI and family status.

DISCLAIMER: Please note that this information is correct as per our latest communications and research; it is intended to be taken as general information only. It does not constitute as financial or accounting advice. Therefore, we encourage you consult a qualified accountant or financial advisor to help determine the extent the medical taxation rebate could apply to your personal circumstance.

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The content on the LifeCare Dental website is provided for education and information purposes only. Information about therapy, service, product or treatment does not imply endorsement and is not intended to replace advice received from your dentist, doctor or other registered health professionals. LifeCare Dental makes no claim as to the accuracy or authenticity of this content.

Additionally, LifeCare Dental does not accept liability to any person for the information or advice provided on this website or incorporated into it by reference. Content has been prepared for Western Australian residents and wider Australian audiences, and was accurate at the time of publication. Readers should note that, over time, currency and completeness of the information may change. All users are urged to always seek advice from a registered health care professional for diagnosis and answers to their medical questions.

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