Did you know that individuals diagnosed with celiac disease are eligible to receive tax deductions for expenses associated with gluten-free products? The rules surrounding this can be tricky, however. Here are three things you should know before filing for a Gluten-Free Food Tax Deduction. This information comes courtesy of the National Foundation for Celiac Awareness:
1) You Need an Official Diagnosis to be Eligible
People adhere to a gluten-free diet for a variety of reasons, but only those medically diagnosed with a gluten-related disorder are eligible for a tax deduction. You’ll need to obtain a prescription from your doctor for a gluten-free diet as your treatment option as well.
2) Keep Track of Your Food Purchases the Entire Year
In order to receive a tax deduction, you will need to calculate the difference between the cost of gluten-free product alternatives versus the cost of conventional gluten-based foods. For example, if you purchase a box of gluten-free crackers for $4.50 and traditional crackers cost $2.50, you’ll only be able to claim the difference ($2).
You will need to record such calculations throughout the year as you purchase your gluten-free products. You may want to use a spreadsheet to keep track of the purchases, as the volume can be a bit overwhelming.
To learn more about which gluten-free products are eligible for a full refund, you should read the Tax Deduction Guide for Gluten-Free Products, available from the National Foundation for Celiac Awareness (NFCA).
3) Refunds are Only Given if Medical Expenses Exceed 7.5% of your Adjusted Gross Income
IRS rules dictate that refunds for medical expenses will be granted only if they are over 7.5% of your Adjusted Gross Income (AGI), which is the total gross income, minus specific reductions. Turbo Tax offers a helpful example for determining if your medical expenses exceed 7.5% of your AGI.
If and when you determine that you are eligible for the tax deduction, you can move forward with your claim. Consult NFCA’s Tax Deduction Guide for Gluten-Free Products for more information.