Do you or one of your dependents have celiac disease? If so, you may have heard this by now but you can take certain deductions off your taxes to offset the extra expense of living a gluten-free lifestyle when it is medically necessary. This of course does not apply to those who just prefer not eating gluten or wheat as part of their health plan because they feel better when they do.
Do I qualify for a tax deduction?
As of 2013 the amount of allowable medical expenses you have to exceed before you can claim a deduction is 10 percent of your adjusted gross income or AGI. The old standard was 7.5 percent. There is a temporary exception for those over the age of 65. In this case the AGI is still 7.5 percent and will remain an exception until Dec.31, 2016.
You must also itemize. You’re only able to claim medical expenses if you itemize your deductions on your federal tax return. You are not allowed to take these expenses on a standard deduction.
You also are not allowed to claim a tax deduction for medical expenses you paid for with funds from your health savings account or flexible spending agreements since amounts paid with funds from those accounts are usually tax-free.
What can I deduct?
You may deduct the cost of gluten-free food that is in excess of the cost of the gluten containing food that you are replacing. For example, if a loaf of gluten-free bread costs $5.00 and a comparable loaf of gluten containing bread costs $2.50, you may include in your medical expenses the excess cost of $2.50. The full cost of special items needed for a GF diet may be deducted. For instance, the cost of Xanthan gum that is used in GF home baked items, because it is never used in a gluten containing recipe.
If you make a special trip to a store to purchase GF foods, the cost of your transportation to and from the store is deductible. If you used your vehicle for the trip during the year 2014, you may deduct 23.5 cents per mile. For 2015, you may deduct 23 cents per mile. You may also include tolls and parking fees. The full cost of postage or other delivery expenses for GF foods made by mail order are deductible.
Stay out of trouble!
No one wants a letter from the IRS, so get an official written diagnosis from your physician. You will need to submit this form with your taxes, so make sure to keep a copy for your records.
Save your receipts for gluten-free groceries! Because based on the list above, you’ll have to figure out what you can deduct and then start your calculations. You will need to calculate the difference between gluten-free products and non-gluten-free products from the grocery store.
Next, file! You’ll have to fill out the medical deductions form 1040, Schedule A. As always in special cases like these it is imperative that you consult your tax preparer when calculating your deductions. In the event that you are audited, refer your auditor to these publications.
· IRS Publication 502
· Revenue Ruling 55-261
· Revenue Ruling 76-80
· Cohen 38 TC 387
· 67 TC 481
· Fleming TC MEMO 1980 583
· Van Kalb TC MEMO 1978 366