Tax deductions for gluten-free food
Given how expensive gluten-free foods may be, many people on a gluten-free diet are interested in saving money. NCA is frequently asked about how to deduct the cost of gluten-free food on income taxes so we are sharing this information with you as the new year begins.
Unfortunately, in our experience, due to the way this deduction is set up, not many people are able to take advantage of it so please read through to determine if this deduction would be worth your time.
If you or one of your dependents has celiac disease and if you itemize your deductions, the extra cost of gluten-free foods may be counted as a medical expense on your tax returns. The key points to be aware of are:
- You may only deduct the difference between the cost of gluten-free food and the cost of the same gluten containing food. For example, if your gluten-free bagels cost $10 and a package of gluten containing bagels sells for $3, you may count the $7 difference as a medical expense.
- The full cost of necessary gluten-free items may be deducted. One such example is xantham gum, a product often used in gluten-free baking but not called for in other recipes.
- The amount of allowable medical expenses must exceed 10% of your adjusted gross income in order to qualify for this deduction. Prior to 2013, this threshold was 7.5%. Between 2013 and 2016, there was a temporary threshold of 7.5% for people 65 or older. Now the medical expenses must exceed 10% of your adjusted gross income for everybody.
- You may deduct the cost of transportation both ways when making a special trip to a grocery store to purchase gluten-free items. You may include tolls and parking expenses.
- Any cost you incur for shipping gluten-free foods is deductible.
- You may not claim a tax deduction for any medical expenses paid for with funds from Health Savings Accounts or Flexible Spending Accounts.
The total amount of your deduction for gluten-free foods should be added to your other medical expenses that are reported on Schedule A of form 1040.
In order to take advantage of this potential tax break, you must have a letter from your doctor stating that you have celiac disease and must follow a gluten-free diet. You may need to submit a copy of this letter with your taxes, and you should save a copy for your own records. You must also save your receipts and be able to detail how you calculated the deductions in case of an audit.
Please also note that we cannot give tax advice and recommend that you discuss this with your tax advisor.