Gluten-Free Tax Deduction Guide

7 Mar

Microsoft Image - Tax Blog

Taxes got you down? Do all of the rules, regulations, codes, exemptions and forms have your head spinning? This is my guide to dissecting gluten-free tax guidelines.

Here is a compilation of all of the resources I found online for gluten-free deductions in comprehensive and comprehendible post.

People diagnosed with celiac disease are entitled to making deductions for the extra costs associated with living gluten-free! If you want to take advantage of the tax benefits associated with celiacs then read below for some tips.

 In the interest of saving time, don’t break out the calculator until you are sure that you qualify for the deductions!

1.First things first: are you entitled to deducting medical expenses?

In order to qualify for medical expense deductions your medical expenses must exceed 10% of your adjusted gross income.

Your adjusted gross income is your taxable income minus any adjustments to income such as deductions, contributions to a traditional IRA and student loan interest.

“For example, if you have a modified adjusted gross income of $45,000 and $5,475 of medical expenses, you would multiply $45,000 by 0.10 (10 percent) to find that only expenses exceeding $4,500 can be deducted. This leaves you with a medical expense deduction of $975 (5,475 – 4,500)” (IRS).

NOTE: it is your TOTAL medical expenses that must exceed 10% of your income, not just your celiac-related expenses.

If your situation meets this criteria the next step is to get an official written diagnosis of celiac disease from your physician. Once you have this you can send it in with the rest of your paperwork.

2. Find out what can be deducted 

You cannot deduct the full price of gluten-free products but you can deduct the cost of gluten-free products that is in EXCESS of the cost of their gluten-containing counterparts.

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For example, if a loaf of gluten-free bread costs $6.00 and a comparable loaf of glutinous bread costs $3.00, you may include in your medical expenses the excess cost of $3.00.

You can deduct the full cost of special gluten-free items like Xanthum Gum which is used in baking GF products.

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Have you been to Pam MacD’s or Whole Foods lately? The transportation costs (gas, parking, tolls) you incur from making  special trips to grocery stores for gluten-free products are deductible.

Have you ordered some gluten-free soy sauce packets from Amazon like I did last week? If so, the full cost of postage or other delivery expenses for GF foods made by mail order are deductible.

3. Fill out the right form!

You report medical expense deductions on Schedule A, Form 1040 which is different from the Form 1040 (US Individual Income Tax Return). Use the Schedule A 1040 form to figure out itemized deductions.

4. FILE!

Send in your Schedule A 1040 form and official written diagnosis from a physician with your other tax documents.

If you are audited: 

Although you do not need to send these documents in when you file your taxes, you will want them on hand in case of an audit.

1. If needed, get a letter from your physician indicating that you have celiac disease and must adhere to a gluten-free diet for life.

2. Substantiation of the expenses in the form of receipts, cash register tapes or cancelled checks for your GF purchases.

3. A schedule showing how you computed your deductions for the GF foods.

(From the Celiac Disease Foundation’s Website)

Here are some fantastic resources:

NFCA’s Gluten-Free Tax Guide

CDF’s Gluten-Free Tax Guide

The best advice I can offer is to do your homework and check out multiple sources for tax information. Filing your taxes may be a pain but in the event of an audit it is better to be prepared and organized than caught off guard. Put in the work to get your taxes done correctly, benefit from the deductions and enjoy another gluten-free fiscal year.

-CC

One Response to “Gluten-Free Tax Deduction Guide”

  1. mocha sumo November 25, 2016 at 8:35 am #

    My colleagues were needing IRS 1040 – Schedule A last month and saw a great service that hosts lots of form templates . If you are searching for IRS 1040 – Schedule A too , here’s https://goo.gl/36r6H0.

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