Finding tax savings in Gluten free food

Gluten – For the longest time it wasn’t even in my vocabulary until people around me (including a family member) were diagnosed with Celiac disease.

A digestive and autoimmune disorder Celiac results in damage to the lining of the small intestine when foods containing a protein called Gluten are eaten. This can cause various mild to severe discomforts. To reverse the effects of this disease doctors often recommend taking Gluten out of the diet. Sounds simple, right?

Unfortunately, it is not as easy as it sounds. Gluten is in all kinds of food, not just bread and on top of that Gluten-Free food is Expensive.

For example: A Gluten Free (GF) loaf of bread could cost as much as 3 times the cost of a regular white or multi-grain bread. Gluten free pasta is no different. All GF certified items such as breads, cake mixes, pizzas, cereals etc. are not only pricier, they are also packaged in less quantity compared to their non-GF counterparts. Generally, 16 Oz of a regular food item would be 10 Oz of Gluten free. The smaller quantity packaging also means that the groceries don’t last as long.

But not all is gloom and doom here. After all, Celiac sufferers do get immediate relief by taking Gluten out of their diets and there are so many choices available now vs. just a few years ago. Thanks to the diet trendsetters!

As for the monetary aspect, there is some relief in knowing that money spent on GF foods can be deducted as medical expenses for federal taxes. I have created some FAQ’s below that would help you explore the GF related tax deductions.

1.     How do I know if I or my dependent qualify?
You qualify if you or your dependent has Celiac disease. Ask your doctor to give you the diagnosis in a letter.

2.  What is available for deductions?

a.      Food: Keep in mind that only the extra cost of GF food is deductible. For example, if a 12 Oz loaf of Udi’s GF bread is $11.27 and a 24 Oz loaf of Pepperidge farms loaf is $3.49, you can potentially deduct the extra cost as a medical expense (see eligibility requirements below).

b.     Travel: Any cost you incur for transportation (tolls and parking) or shipping GF foods may also be deductible.

      3.     Why do it?

I recognize that tracking this expense is very tedious. But think about it – price difference between an Udi’s GF multi-grain bread and a regular multi-grain bread is .79/Oz and if you consume a loaf a week, you spend an extra (.79 Oz*12 Oz *52 weeks) = $492/year.

This is just one food item. The deductions start to add up quickly when you consider all other food items eg., pasta, pizza, cereal, snacks and the list goes on and on.

If you are still with me, as in you qualify and would like to take advantage of these deductions, here are some ways to organize so tax filings are easier.

-         Get a note from the doctor on the Celiac diagnosis.
-         Save your grocery receipts. This will have the name of the store.
-         Start a spreadsheet to track the grocery items and mileage.
-         When filing taxes, fill out Form 1040 schedule A and claim deduction as a medical expense.

Other caveats,

• This expense is only available as a deduction if you itemize your deductions.
• For the expense to qualify for deduction, the amount of allowable medical expenses must exceed 10% of your adjusted gross income.

In a nutshell, you may be able to take money spent on GF food as a medical expense. But according to National Celiac Org, “Unfortunately, the way the deduction is being set up, not many people are able to take advantage of it.”

Hope this blog provided the information to help you take advantage of the tax deduction. Please note, this is not a tax advice and recommend that you check with your tax adviser for specific tax related questions including your eligibility for this deduction.

If you have any questions, please post them in the Comments section.