Do you have Celiac disease? Then you know that Gluten Free products are a “budget buster”! What you might not know is that they are also tax deductible! Actually any allergen free food can be deducted if you have a proper diagnosis from a doctor!
Here’s what you need to know:
- Visit your doctor:You’ll need a note from your doctor specifying you are diagnosed with celiac disease and must consume a gluten free diet for life. If you are claiming food for a different type of allergy just make sure your doctor specifies what you are allergic to and that you MUST consume a diet that is free of this allergen for life.
- Break out the calculator: You can claim only the EXTRA COST of the gluten-free or allergen free product over what you would pay for a similar item at a grocery store. For example, if wheat flour costs $.89 per 5 lbs. and Gluten-Free rice flour is $3.25 per 5 lbs., the DIFFERENCE of $2.36 is tax deductible.
- Additional Deductions: You may also claim mileage expense for the extra trip to the health or specialty store and postage/shipping if you’re ordering products online.
- Xantham Gum- The cost of Xantham Gum used in gluten-free home baked goods is completely different than anything used in an ordinary recipe, so in the opinion of the IRS, the total cost of this item can be claimed. (this was true as of 1993 this may have changed since then?)
Here’s what you need to do:
- Proof of Purchase – Save all receipts and cancelled checks and ALWAYS highlight or circle Gluten Free products so you can easily tell at the end of the year which items will be calculated. This is important as items are often abbreviated on your receipt and it can be confusing…so do it right away!
- Keeping Track – Keep track of mileage and shipping charges and postage as these are also deductible. Keep this with your receipts!
- Spread Sheet- Start a spread sheet with a column for regular food and a column for it’s equivalent gluten-free product. Refer to this at tax time to figure your deductions and add to it through out the year if and when you buy new products.
- Organization - Keep all receipts in one place so that you are ready to go come tax time!
- Filing your claim: When it comes time to file your claim fill out form 1040 schedule A for medical deductions. Attach a letter from your doctor to your tax return. This letter should state that you have Celiac Sprue disease and must adhere to a total gluten-free diet for life.
- Your Accountant – Let your accountant know ahead of time you’ll be claiming these expenses so he may education himself if he chooses before hand!
- Your records - File your receipts away with your tax return so you have them if they ever get called into question.
Your IRS office may refer you to Publication 17 and tell you these deductions are not permissible. IRS representatives have ruled otherwise and this is applicable throughout the US. Refer them to the following Citations:
- IRS Publication 502
- Revenue Rulings: 55-261, 76-80, 2002-19 and 67 TC 481
- Cohen 38 TC 387
- Flemming TC MEMO 1980 583
- Van Kalb TC MEMO 1978 366
Feel free to cite these references in your tax paperwork. For specific circumstances, contact an accountant.
Updates from Readers:
Reader Lisa sent the following statement:
“I got a note from our doctor stating that 2 of my sons and myself are unable to eat gluten and must be on a gluten-free diet, she also put that 3 of my sons cannot have dairy (2 of them are both CF/GF and one is just CF). I am able to send in the difference between the cost of the regular items vs. the allergy free items with a spreadsheet and the receipts to my Basic Flex Admin company and get reimbursed from my Basic Flex account.
Some employers/Health Admin companies allow this and some do not, so call and ask if you have a basic flex account. This is a good thing for us because our Basic Flex covers most of our health care costs out of pocket we don’t meet the minimums to be able to itemize our medical costs so I wouldn’t be able to do the deductions on our taxes.”
From Reader Natacha:
“DO NOT HIGHLIGHT RECEIPTS The best thing to do is retain a copy as well as the original. If you can scan them that is best and easiest to organize (always backup computer files) or make xerox copies and highlight those. Over time the highlight will destroy the image on an original receipt and leave you with blank paper…seems small but would hate to have someone do all that work just to have unusable scraps of paper”