Anyone who has experience with food allergies or celiac disease knows not only the difficult and painful symptoms that come along with them, but also the struggle that accompanies the process of looking for foods that are safe to eat. The struggle does not stop there, however. The high price of specialty foods is yet another burden for sufferers of food allergies and celiac disease, along with their caretakers. Wouldn’t it be nice if some form of break existed for individuals who experience so closely the struggles of food allergies? Thanks to current medical expense tax credits, such a break may exist for you!
You may be eligible to deduct certain food and medical costs on your tax return if you avoid allergens in your diet, but a number of stipulations do exist.
Tax deductions are not an option for individuals who purchase special foods for an ethical or moral rationale, like Kosher or Halal products. Even if your reason for buying specific foods (or avoiding foods) includes improving your overall health, the cost of such foods is not deductible.
You also are not eligible for a deduction for the cost of food that you use to improve your overall health even if a doctor makes a specific recommendation for you to follow such a diet. Low fat, low sugar or low sodium diets, although they are beneficial for your health, are not normally allowed to be taken as a tax deduction. The same also applies to food and drink purchased as a substitute for a “normal” diet, like foods for weight loss plans in programs such as Weight Watchers or NutriSystem.
There is an option, however, for some individuals. If food is used to treat a medically diagnosed illness (like severe food allergies) or disorder (like Celiac Disease) that has been diagnosed by a physician, it may be deductible. The IRS will allow a tax break if the following criteria are met:
- The food must alleviate or treat an illness;
- The food must not be used to satisfy normal nutritional needs; and
- The need for the food must be substantiated by a physician.
Additionally, the person with the illness or allergy must be diagnosed by a physician and must be a spouse or a qualifying dependent listed on the tax return. Also, the need for special foods (like gluten- or dairy-free) needs to be substantiated by a physician.
What Can I Deduct?
You can deduct your allergen-free food purchases related to your diagnosis. The plot does thicken a little from there. You cannot deduct the full price of the food. Instead, you may only deduct the difference in cost between the specialty food and “regular” food. For example, if you have Celiac Disease and purchase gluten-free bread that costs $6/loaf and regular bread costs $3/loaf, you may only deduct the difference of $3.
Along with you allergen-free food expenses, you may also be able to deduct co-pays, prescription costs and other out-of-pocket payments. Take advantage of other possibilities to make the most of your deduction, including transportation costs like taxi, bus or parking fees. If you drive, keep track of your mileage and claim the standard medical deduction of 19 cents per mile.
Taking the Deduction
In order to take a deduction for food allergy- or celiac disease-related purchases, you must itemize on IRS Form 1040 (Schedule A). According to tax law, the total of your qualifying expenses must meet a threshold, or a “floor.” The floor is currently 10 percent of your adjusted gross income (AGI).
To figure what your actual deduction is, you must first determine the amount of your expenses which exceeds the floor. When figuring up numbers, remember to include all of the possibilities listed above.
For extra measure, keep detailed records. Although written records are not submitted with your return, it is a good idea to keep all of your documents in case the IRS audits you. Hang onto these items for at least three years because the IRS can audit a return for up to three years after it has been filed!