Itemized Deductions For Celiacs

[plumbago]

Hello everyone,

I did do a quick search on this topic and didn't find what I was looking for - but again, it was a quick search.

I've filed already for this year, so this question's answers I will use for tax year 2011, but there may be some last minute filers who find this useful.

I know that the difference between a gluten item and a gluten-free item is deductible for tax purposes:

"You may deduct the cost of Gluten-Free (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."

I do not process my own taxes, but hire a firm. So my question is, am I the one who decides that, just for one example, the gluten free hand lotion I purchased at a local "organic" food shop which costs $10.99 is $3.00 more expensive than the gluten hand lotion? Who decides? Let's say I choose something a little more elemental, like a loaf of Udi's gluten-free bread. That cost me about $5.99. To price the gluten bread, can I pick, say Wonder bread? Or the cheapest bread?

This seems kind of arbitrary, so I just thought I'd ask.

Thanks!

Plumbago

[ravenwoodglass]

I think the best person to ask about this is your tax professional. You would have to itemize and save all your reciepts. You also would only be able to deduct as a medical expense so if your overall medical expenses are not real high then you wouldn't get any deduction.

[plumbago]

Yes, good advice. Thanks. I will contact them.

ADDED: But not to look a gift horse in the mouth, the deductions should also apply to all those extra veggies, fruit, and meat I have to buy to feel full (not to mention all that extra chopping, sauteeing, and cleaning!), but how that all would work, God only knows!

Plumbago

[ravenwoodglass]

the deductions should also apply to all those extra veggies, fruit, and meat I have to buy to feel full (not to mention all that extra chopping, sauteeing, and cleaning!), but how that all would work, God only knows!

Plumbago

Yea it would be nice if we could deduct those, but we can't.

[plumbago]

Hello again,

April 2012 - just talked to the person who prepares my tax returns. What he said is:

In order to deduct the cost of gluten-free food (and actually it would be the difference between the gluten-free food and regular food), the total costs of one's medical bills would have to be 7.5% of one's salary.

[kareng]

I think the hard part, and what will trigger a closer look at your taxes by the IRS, is the " difference ". If you come up with a way to do it, let us know.

[Bubba's Mom]

My hubby wants me to keep track of this for next year's taxes. I've been saving receipts, but I should probably start a spread sheet or something? Adding to the list weekly would be easier than waiting until the end of the year and having to do all of that math?

I also mentioned I spend a LOT more on fruits and veggies because I can't eat the snacks I used to. Too bad those aren't allowed on the list of expenses!

[Adalaide]

I do taxes, but am by no means an expert so certainly ask your "person" instead of taking my word, as things are subject to change and I am subject to being wrong. Included in that 7.5% is all medical expenses including the cost of medical insurance if it is not already a pre-tax deduction. (For instance I pay for my dental insurance out of my bank account so can include that in the deduction.) Dentist, eyeglasses, contacts, all prescriptions. Also, when I take the difference between my gluten free foods and what I would normally buy I check once a month on the price of what I used to buy and keep a record of it. I can still pick up a loaf of store brand white bread for a buck, make the IRS prove you would buy $4 a loaf whole wheat bread if you could eat it. Also, if you receive any sort of government assistance with food that doesn't cover your entire cost, make sure that you buy your gluten free items exclusively with cash.

Also, the spreadsheet idea is excellent! Your tax preparer will kiss you next year. Nothing is worse than someone walking in and handing you a shoebox full of receipts and saying it's their medical expenses. If you're familiar with Excel it's super easy to get it to do all of your math for you, it is by far my favorite office program.

[IrishHeart]

For what it is worth, I found it "interesting" that my doctor told me he wrote the "medical necessity" letter for his patient, who filed her taxes with the gluten-free food deduction claims included and she was promptly audited.

While people may have nothing to hide, from what I hear, an audit is a royal Pain in the Butt.

I saved all the receipts the first year after DX, kept a spread sheet, even went to the store and wrote down comparable non-gluten-free prices, etc. and hubs totalled it and the amount we might get back (because I also had plenty of medical expenses ) was not worth the thought/aggravation of being audited so, he bagged it.

This is just our decision, of course.

If anyone does it successfully, please tell the members!

[love2travel]

We do it successfully but it helps that my husband is a chartered accoutant! Laws are different in Canada so I cannot address procedures. However, as I have many other medical expenses (i.e. weekly massage, physiotherapy, acupuncture, etc.) it is worth our while to do it. I do a simple Excel spreadsheet that takes minutes to do each month. It is not difficult to track at all.

[Gemini]

For what it is worth, I found it "interesting" that my doctor told me he wrote the "medical necessity" letter for his patient, who filed her taxes with the gluten-free food deduction claims included and she was promptly audited.

While people may have nothing to hide, from what I hear, an audit is a royal Pain in the Butt.

I saved all the receipts the first year after DX, kept a spread sheet, even went to the store and wrote down comparable non-gluten-free prices, etc. and hubs totalled it and the amount we might get back (because I also had plenty of medical expenses ) was not worth the thought/aggravation of being audited so, he bagged it.

This is just our decision, of course.

If anyone does it successfully, please tell the members!

IrishHeart is right....unless you make next to no money on a yearly basis, forget it. You would have to be living at poverty level to meet the minimum requirements in the US for using this as a valid tax deduction. And then you are guaranteed an audit...no thank you! I think unless you live on processed gluten-free food and make no money, it wouldn't work.

[love2travel]

IrishHeart is right....unless you make next to no money on a yearly basis, forget it. You would have to be living at poverty level to meet the minimum requirements in the US for using this as a valid tax deduction. And then you are guaranteed an audit...no thank you! I think unless you live on processed gluten-free food and make no money, it wouldn't work.

It is a huge misconception here in Canada that you must make a certain amount of money. If that were the case we would not be claiming, either, as we make too much. I can't explain it very well but my husband spoke at our celiac group and there are plenty of people who make a lot of money there who were shocked that they could claim after all. Their accountants even mislead them because they simply did not know details or look into it further. My husband is also an auditor besides being a CA so he is an expert when it comes to this stuff. I know it is likely different in the U.S., though, but just thought I would mention it in case any Canadians read this.

About 80% of my claims are all the gluten-free flours I buy regularly. Some of them are $15-$20 per pound which is insane! That adds up very quickly.

[sariesue]

I do taxes, but am by no means an expert so certainly ask your "person" instead of taking my word, as things are subject to change and I am subject to being wrong. Included in that 7.5% is all medical expenses including the cost of medical insurance if it is not already a pre-tax deduction. (For instance I pay for my dental insurance out of my bank account so can include that in the deduction.) Dentist, eyeglasses, contacts, all prescriptions. Also, when I take the difference between my gluten free foods and what I would normally buy I check once a month on the price of what I used to buy and keep a record of it. I can still pick up a loaf of store brand white bread for a buck, make the IRS prove you would buy $4 a loaf whole wheat bread if you could eat it. Also, if you receive any sort of government assistance with food that doesn't cover your entire cost, make sure that you buy your gluten free items exclusively with cash.

Also, the spreadsheet idea is excellent! Your tax preparer will kiss you next year. Nothing is worse than someone walking in and handing you a shoebox full of receipts and saying it's their medical expenses. If you're familiar with Excel it's super easy to get it to do all of your math for you, it is by far my favorite office program.

I think that if you only use the 1$ crappy bread as your base price for bread to get the most out of the deduction you WILL be audited especially if you eat a lot of bread. Because that honestly is and looks like a scam because I still buy wheat bread for my husband and there aren't any brands that are 1$ in my supermarket. The cheapest is over 2$ with most being about 3$. If your more everyday medical expenses are well over 7.5% they might not look too too close, but if you are on the cusp of making the 7.5% for the deduction I wouldn't want to risk the audit by using the lowest price you can find anywhere especially if you don't buy exclusively store brand items for everything possible.

Plus there is the gray area of medical expense if you factor in the gluten free products that you had to buy for yourself(the one with celiac) and were partly eaten by a spouse or children who do not have celiac and have no medical need to eat gluten free products. Can you still deduct the full amount of a product like bread as a medical expense if it wasn't all consumed by the person who has the medical need for the product. Because that person could eat regular bread and you would have spent much less buying gluten free bread. Bread is a great example for this because it could be hard to explain how one person is eating over a loaf a bread a week. Unless you could prove that you can't have a shared household which would probably be hard if not impossible to do easily. Especially since many people with celiac live in shared households to some degree. Like mine where the only gluten products are bread and one bag of chips which was an accident.

[Adalaide]

I certainly wouldn't suggest trying to write off the expenses if the whole household was eating the gluten free products but wasn't required to. In the event of an audit it would probably be highly suspect. I'm buying a loaf of bread every 1-2 months so it isn't like I'm buying a lot of it. I did forget to mention you absolutely must be able to get a note from your doctor deeming the diet medically necessary, without it all deductions will be disqualified.

It is also a huge misconception that you have to practically be poverty level to do this. I've itemized deductions, including medical for families with annual incomes over $100-$200 thousand. Of course, at that point you're talking a lot of medical expenses but apparently that isn't very uncommon. It becomes worth it when you add in your things like mortgage interest, work expenses, taxes, and charitable donations (which are the big ones) the difference can be thousands of dollars back instead of thousands paid. If itemizing is right for you, it can be worth it. Of course, you are subject to auditing which I suppose can be scary. I've only been audited once and I'm not scared of the IRS although most people seem to be. (Just my experience.)

It's a very personal decision about whether or not deducting is a good idea. I happen to have a deep and sick twisted love of Microsoft Office and especially Excel, I keep track of my expenses so even if I can't itemize it's still fun for me.