2016 tax return – deducting medical expenses

How to use medical expenses to maximize tax savings. Source: iStock / sturti

It’s that time of year again. In the canton of Zurich, taxpayers need to have completed and submitted their tax return by 31st March 2017. Since every possible deduction helps ease the pain of the the tax bill, we have some good news for taxpayers – dental bills, health insurance premiums and other healthcare costs can be claimed, to a certain degree at least, as deductible expenses. Find out here what to watch out for and how to use medical expenses to maximize your tax savings.

Let's start with the good news, which is that it is possible to deduct health insurance premiums from your income. The bad news, however, is that you cannot deduct the full amount. Precisely how much you can claim is decided separately by each canton. For example, if you are married and employed, you can deduct a maximum of 4,800 francs in the canton of Berne, or a maximum of 5,200 francs in the canton of Zurich.

But this is not the only healthcare-related cost you can put on your tax return – you can also include actual medical expenses. However, it is important to study the tax return guidelines carefully as you can only deduct expenses such as dentist, doctor, hospital, medication and therapy if the costs exceed five per cent of your income. It’s also important to note that you can only claim medical expenses for treatment that has been prescribed by a doctor. So if you choose to have an operation on your eyes for purely aesthetic reasons, you are solely responsible for the associated costs and cannot therefore claim them on the tax return.

Schedule operations for the first half of the year if possible

If your medical treatment has been prescribed by a doctor and is therefore tax-deductible, it's a good idea to plan ahead. If you arrange medical appointments, therapy sessions and so on in the first half of the year wherever possible, you can be sure that you will receive all the related invoices in the same year. They can therefore be calculated on the basis of your current coinsurance. Otherwise you risk losing the deduction.

Don’t forget: To ensure you can actually claim premium payments and medical expenses, you will need a tax confirmation from your health insurance provider. If you don't receive one automatically, you can simply call your provider to request one.

Changing health insurance provider mid-year

While we're on the subject of maximizing benefits, did you know that in certain circumstances you can cancel your health insurance policy at the end of the first half of the year i.e. by giving notice to 30th June 2017, and switch to another provider? Policyholders insured under the traditional model with the minimum deductible of 300 francs (zero francs for children) are allowed to do this. But a word of warning: The notice period in this case is three months, so your health insurer must receive your cancellation letter by 31st March at the latest. Create your cancellation letter in just a few steps.