Tax Break

[westiepaws]

Hi Everybody, I think I read somewhere at celiac.com or at the message boards that we can take the extra cost of purchasing allergy-free foods, etc., off our income tax. I'm avoiding gluten, casien and soy so that was very exciting news to me !

However, I met with my accountant yesterday; she looked up the rule on this; and she said it applies only to *supplements* -- i.e., things that we have to have *in addition to* the usual stuff. For example, we can take off special vitamins, etc. required by our celiac, things we would *not* be taking if we were *not* celiac.

BUT we can't take off, for example, gluten-free cereal, because it is not a *supplement,* it is *substitute* for regular cereal. I.e., we would be eating cereal even if we were celiac.

Has anyone actually filed and taken this off your taxes? If yes, did you have a CPA who said it was okay and had no qualms about it? And if yes to that, can you tell me the part of the tax code that your CPA used to justify what you did? And finally, did you get audited, and if you did, did that deduction hold up to the audit's scrutiny?

Thanks,

Lea

[ShortStuff2309]

I just read that a few days ago about tax breaks and was all excited about it. That stinks!

[Guest jhmom]

I came across this somewhere. I claimed my gluten free food on my taxes (the difference between what I would have paid on regular food and the increase of cost on gluten-free food). I hope this helps you

Hello All,

Below is info taken from The Celiac Disease Foundation and can be found on their website.  However, being that it is tax time again, I thought it would be worth sharing.  If you didn't save receipts from last year, start saving them now for next year.  (And yes, you're right... not everyone will qualify, and not everyone will go through the hassle).  But, here it is... in case you didn't know:

TAX DEDUCTION FOR GLUTEN-FREE FOODS AS MEDICAL EXPENSE

1. You may deduct the cost of Gluten-Free (gluten-free) products that are in EXCESS of the cost of the gluten containing product that you are replacing.

2. The full cost of special items needed for a gluten-free diet may be deducted.  An example is the cost of XANTHAN GUM (methyl cellulose) used in gluten-free home-baked items, which is completely different than anything used in an ordinary recipe.

3. If you make a special trip to a specialty store to purchase gluten-free foods, the actual cost of your transportation to and from the store is deductible.  If you are using your vehicle for the trip, you may deduct $.10 per mile each way.

4. The full cost of postage or other delivery expenses on gluten-free purchases made by mail order are deductible.

If you are audited, you will need a letter from your doctor indicating that you have Celiac Disease and must adhere to a Gluten-free diet for life.  You will also need substantiation in the form of receipts, cast register tapes or canceled checks for your gluten-free purchases and a schedule showing how you computed your deductions for the gluten-free foods.

The total amount of your deduction for gluten-free foods should be added to your other medical expenses that are reported on line 1 of Schedule A of your form 1040.  Do not include your doctors letter, your receipts or your schedule showing how you computed your deduction for gluten-free foods.  Save these documents which should be submitted only in the event you are audited by IRS or your state's taxing authority.

If you are audited and the auditor tells you that these items are not deductible, refer the auditor to:

· Revenue Ruling 55-261

· Cohen 38 TC 387

· Revenue Ruling 76-80

· 67TC 481

· Fleming TC MEMO 1980 583

· Van Kalb TC MEMO 1978 366

Keep a worksheet to track your gluten-free purchases.  The amount of medical expense you may deduct is the difference between the price of the gluten-free product purchased and the price of the product replaced (if any) plus 10 cents per mile for vehicle transportation to and from the specialty store plus any shipping charges. 

[Guest nini]

My CPA said that it was the cost of the difference in price between regular gluten containing foods and the gluten-free versions, that you had to have a Dr.s note with a dx to submit with it, and keep all receipts. At this point we are NOT claiming this as an write off expense, but if at some point they make the rules a little clearer, we might.

[celiac3270]

Yes...you can't deduct the full cost of gluten-free cereal as you could the full cost of necessary supplements, but you could deduct the difference between the gluten-free and non-gluten-free cereal.

[mouse]

I was told that I definately could take the shipping costs under medical deductions. Since we do not have much in the way of gluten-free in the area, I have to drive 45 minutes to Whole Foods, Sprouts is 30 minutes away and our local health food store has minimal. I can only get a couple of items at any of them.. I order mixes from a Lake Zurich, Il Health Food Store where the owner has been gluten-free for many years. It saves me money on flavorful choices, but the shipping kills me. I get the greatest ice cream cones from Il. as Whole Foods won't carry them because of breakage.

Armetta

[cdford]

I just got audited and they did not give me any grief. I write the cost of the "regular" item next to the cost of the gluten-free item on my receipt and take the difference off on my taxes.

[lovegrov]

I would absolutely follow the advice of my CPA or tax person. The fact is that this is a very gray area that's never been completely ruled on. And even if you are taking it as a medical deducation, you MUST be spending more than 7.5 percent of your gross on medical before it counts at all. It can't just come straight off your taxes.

The possible problem here is that nobody here needs gluten-free bread, cookies, cereal, pasta cake, doughnuts, pretzels etc to eat a healthy and balanced diet. In fact, we'd be better off physically (psychologically is another matter) without that stuff. The IRS ruled years ago that special diet food wasn't necessary to lose weight and so it is not deductible as a medical expense. It's possible they would feel the same about gluten-free food, or so the argument goes.

I am not a tax expert.

richard

[frenchiemama]

I haven't even been keeping track because of the 7.5% rule. There is no way that the difference in cost is that much over a year (for us at least).

[tarnalberry]

I haven't even been keeping track because of the 7.5% rule. There is no way that the difference in cost is that much over a year (for us at least).

<{POST_SNAPBACK}>

Just for clarification, that's ALL medical expenses need to be at least 7.5% of your income for the year - not just gluten-free food. ;-)

[frenchiemama]

Yeah I know, but it still won't even be close. I actually don't buy very much processed food, and even with other medical bills it will still be a couple grand short.

[cdford]

Ah, Carolyn, to be in your shoes... Our medical expenses were low (for us) last year at only$8,500+/-. The year before, our out of pocket was over $27,000! So much for that maximum on our insurance. It is the stuff they don't apply to it that eats us alive.

[frenchiemama]

Holy cow! That's a lot of medical expenses! It's a good thing the medical deduction exists.

[skbird]

Another option is if you have a cafeteria plan at work. You can set aside pre-tax dollars for medical costs, supplements, eyeglasses, special foods, etc. I am considering upping mine next year so I can get reimbursed for some of my food costs. You still have to save reciepts but it's not something you have to do on your taxes and worry about getting audited. The only obstacle is finding out what your administrator will let you claim. I'm not sure, but I think it depends by state. I know our's at my work is very liberal.

Stephanie

[Guest imsohungry]

Interesting topic. I have had enough medical expenses in the past (over 7.5%) to use the deduction...however, praise God, recently (last year) I have been more healthy overall and have better insurance.

If I was "borderline" for meeting the 7.5 then I might use the deduction for the difference in food cost by having to eat gluten-free...but now that I'm so far away from 7.5% in medical expenses (thank God) ...it's pointless to worry about it.

-Julie

[westiepaws]

Thanks everyone, this helps a lot. For the first time in my life I actually think I'll be meeting the 7.5 percent requirement b/cause of all the testing to diagnose me this year. !!