If Christmas was the most wonderful time of the year, then we’ve definitely moved into the second most wonderful time of the year: tax season, that glorious period between January 1 and April 15 when we all, to greater and lesser degrees, become accountants.
Inevitably, this brings up a new round of blogs and articles highlighting the gluten-free tax write-off. Here’s a basic primer on how it works: a) you must qualify, and b) you must keep detailed records and receipts.
Qualification
In order to qualify for a gluten-free tax write-off, you must have an official medical diagnosis from your doctor of celiac disease or another recognized condition that warrants strict lifelong adherence to a gluten-free diet. And you must also have a formal prescription that specifies a gluten-free diet as your course of treatment.
Accounting
The premise of the tax write-off is that gluten-free foods cost more than “regular” foods, and therefore you’re entitled to write off that portion of your expenses which are in excess of what you might normally expect to spend on regular versions of the same foods. For example, if a regular version of the food costs $3, and the gluten-free version costs $5, you may write off $2.
But it’s not quite that simple. This gluten-free “premium” is aggregated together with other qualifying medical expenses, such as medical co-pays, prescription meds, etc. The lump sum total in excess of 7.5% of your gross income is the portion you actually get to write off on your taxes.
And of course, you need to keep detailed, accurate records: grocery store receipts, plus the gluten-ous benchmarks against which you’re calculating the GF premium.
The Case for the Write-Off
If you were still eating gluten and getting sick, you’d be writing off all sorts of medical expenses—more co-pays, medication, tests, etc. (assuming the total of these expenses exceeded 7.5% of your income). On a gluten-free diet, you’re in theory avoiding incurring all those costs on the medical system, and so shouldn’t you be able to write off your marginal cost increases for food, which replace the standard medical expenses?
And as researchers refine other treatment protocols (pills, enzyme therapy, vaccines, and who knows what else), those future treatments will be qualifying medical expenses. As another (and to date, the only known effective) option, shouldn’t diet be a qualifying medical expense as well?
Other countries, such as Italy, offer stipend to offset cost of maintaining GF diet. Shouldn’t U.S. GF folks have some sort of financial relief as well?
Problems With the System
But there are fundamental problems with the system, and I’m not convinced that those of us who are gluten-free for medical reasons should be entitled to write off our food expenses. I’ll explain.
Room for abuse
First, like many systems, the fairly open-ended nature of the write-off leaves plenty of room open for abuse. For example, I haven’t seen any tax guidelines specifying that you must benchmark like with like. In theory, you could purchase an expensive GF version of a product, and benchmark it against a cheap, budget, brand x “standard” version of the food, thus maximizing the price difference (and hence, your tax write-off), even though that constitutes something of an apples to oranges comparison.
Imperfect accounting
Second, the accounting system is imperfect. For example, if you buy Pamela’s chocolate chunk cookies and benchmark them against Chips Ahoy chocolate chip cookies, both from Walmart (for the sake of this illustration), you’re looking at a base price difference of $3.96 vs. $2.50. But Pamela’s package includes 207 grams of cookies (9 cookies x 23 grams per cookie), but the Chips Ahoy package includes 363 grams of cookies (11 servings x 33 grams per serving). Should you scale the prices to common portion sizes? Fundamentally, you’re paying more but getting less with Pamela’s, so a straight $3.96 vs. $2.50 doesn’t fully capture the increased cost of the gluten-free version.
And what about naturally gluten-free specialty products such as Mary’s Gone Crackers, which are enjoyed equally by gluten-eating and gluten-free folks alike. Should you be able to compare Mary’s Gone Crackers to Triscuits or some other wheat-based cracker, and write off the difference, even though a product such as Mary’s isn’t first and foremost a specialty food meant to meet the dietary needs of the gluten-free community?
Myriad factors affect grocery bills
Further, the price differences between gluten-free and gluten-ous foods is just one of many, many food purchasing decisions we make that affect price and our weekly grocery bill. What about the family (like us) who chooses to spend many times more on real, pure maple syrup than to buy the imitation fake stuff made with corn syrup, caramel coloring, imitation flavors, and artificial colors, because we believe the real thing to be better and healthier for us? Or the person who opts for organic produce, or pastured meat and eggs, or sustainably harvested seafood? All of these decisions will raise your grocery bill, and all of these decisions potentially come with real and tangible positive health and environmental impacts. I don’t think anyone would strenuously argue that we write-off the added costs of these food choices. What makes gluten-free different?
I know what you might say: we HAVE to do gluten-free, it’s not a choice. True, but that brings me to my final point.
Subsidizing junk food?
Whether you can eat gluten or you’re gluten-free, the core of a healthy diet comes down to the same foods—vegetables, fruit, nuts, seeds, whole gluten-free grains (such as rice and quinoa), whole meats and fish, eggs, and if you can, dairy. Their costs are the same, whether you’re gluten-free or not.
Which means that the gluten-free foods you’re writing off on your taxes are very likely of the processed, refined, and/or junk food variety: store-bought bread, pizza, cookies, crackers, cake, brownies, and other indulgences. While some of those foods could be part of a healthy, balanced diet, most of them are not; they are treats. Don’t get me wrong—I love my baked gluten-free sweets as much as the next person. But should you be eligible to write off such foods on your taxes? I’m not so sure. In fact, I’d wager not.
Final thoughts
It’s no secret that the food we eat is intimately connected to our health. Some of that food costs more than other food—that’s just life, and there are myriad reasons why different foods cost what they do (ranging from dedicated GF facilities to deep agriculture subsidies that artificially deflate the cost of certain food commodities). On the one hand, only a fool leaves money on the table, and the availability of the GF tax write-off is an opportunity that many (diligent folks) can and do pursue. But I’d argue that we need to rethink the write-off. It has room for improvement, and we might even consider abolishing it entirely.
What do you think?
–Pete
P.S. For those who’ve asked for citations for the IRS gluten-free tax deduction, you can refer to the following sources:
- National Foundation for Celiac Awareness “Tax Deduction Guide for Gluten-Free Products“
- Celiac Disease Foundation “Tax Deductions for Celiacs“
- Celiac Sprue Association “Gluten-Free Federal Tax Deduction“
- Kogan Celiac Center “Claiming Gluten Free Foods as a Medical Expense on Your Tax Return“
Thank you for this article. I was diagnosed with celiac disease about 8 years ago, and I had no idea there was a tax write off for GF items! This is great, although the detailing required is onerous. Welcome to our world, right? Moreover, it is distressing that it essentially requires a note from your doctor – more blending of our personal, medical business into governmental records. But I digress. Thanks for the info! Do you have a specific citation to the tax laws detailing the write off?
Ellie, I added links to four information sources at the bottom of the post.
Cheers,
Pete
I have heard of this before, but never looked into it. We all only have gluten sensitivity and would not qualify. I am, however, going to forward your blog post to those I know who are actually diagnosed with celiac.
Pete, I don’t know that everyone reading is going to “get” the takeaway from your article as so many get excited about that tax write-off when they hear about it, but honestly, I don’t see how anyone who can qualify for the write-off could be eating healthy or even decent food in any way. One would have to be eating processed gf food 24/7 it seems to me. As you have shared, that is just not a good idea. Now if we could get a tax write-off for whole and organic foods, that might be something. Even then, I really don’t think I’d qualify and I maintain that eating healthy gf real food does not have to be that much more expensive than standard American gluten-full fare. Thanks for the post!
Shirley
I know you think the system is flawed but there are some of us who can’t afford to eat GF (we have to, it’s not just a diet for us) and pay bills and other expenses.
It must be nice to be able to afford GF foods and not have to worry about how you are going to afford the rest of your bills and expenses. So just because this doesn’t work for you why take it away from those of us it could help?
I’ve been Celiac for 15 years and my daughter has been for 6 years and we have never qualified for the medical deductions, due to a great medical insurance policy… however, I lost my job and was out of work and had no insurance for a year. I kept track of everything, but I still won’t get much of a deduction, in spite of a very low income… we just don’t buy that much specialty food.
Just to let you know, you do not have to provide the note from your doctor unless requested by an auditor. You should place a copy of your diagnosis and “prescribed” gluten free diet in with your tax records each year, just in case.
YES WE SHOULD HAVE A TAX ‘WRITE OFF’ or STIPEND! Just because we (herein referring to Celiac patients) pay more for less (not in our control but GREATLY to our detriment) because almost all GF products are devoid of ANY nutrition, AGAIN not something we can avoid as well as to impede our health! Celiacs are constantly getting less for higher cost in every way! If there was a strait deduction or dollar amount I would take it, but is any of this something we have a way to deal with OTHER than the high cost and the lesser amounts we are offered? NO. Do diabetics of varying degree in health only get to write off a portion of their medicine due to lack of doing what ‘the media’ says they can to help themselves? NO. WHY should Celiacs be limited to any deductions when there are so MANY different ways to suffer with this and the ONLY way is diet even if long term or permanent damage has been done. The USA is one of the worst countries in the world to diagnose this disease and now we shouldn’t get any help because big pharmaceuticals can’t make money off us yet? We deserve the help we need!
P.S. Since when has tax law ever been fair or just or equal more less un-flawed?
Just a note, when I’ve looked into this, I’ve been told, “You WILL get audited if you take this write-off,” by multiple tax lawyers.
I’ve been deducting the additional cost of gluten free foods for 23 years. It is a pain in the neck not only getting the “regular” price but also calculating the package weight differences. I don’t remember to keep every receipt, but I try. It is worth a few hours work to save an average of $750 a year in taxes. Udi’s or Rudi’s bread is not any better qualify than the average store brand is more than double the cost. Why shouldn’t we take a deduction? All in all I thought this was a rather weak post, arguing both for and against, as well as wingeing about what other governments do. It is what we have. Until we have powerful lobbies, we aren’t getting a change. If you are financially well off enough not to care about an extra $750 in deduction–don’t take it.
Hi Shirley,
Thanks for adding your voice to the conversation! I know you’ve long been a proponent of the idea that eating gluten-free need not burn a hole in our wallets.
Cheers,
Pete
Hi Anonymous (1/26),
I have to eat gluten-free as well; it’s not “just a diet” for me, either.
Be careful before you accuse someone—such as us—of having enough surplus income to “be able to afford GF foods and not have to worry about” other expenses. Our diet is focused on whole foods (fruits and veggies, nuts and seeds, meat, fish, eggs, etc.), the types of foods—as I note in the post—that cost the same whether you’re gluten-free or not. We buy relatively few GF specialty foods. And like many American families, we have a budget.
Best,
Pete
Hi Anonymous (1/27),
Though I didn’t go into that level of detail in the post, you’re quite right—keep the doctor’s note and other records on file in the event of an audit; you’re not required to submit them with your tax return.
Your point about a relatively small deduction I think is typical. You’d have to buy a lot of GF specialty foods, and even then, only write off that amount in excess of 7.5% of your gross income.
Cheers,
Pete
Hi Anonymous (1/27 #2),
Like previous anonymous commenters, you raise a good and valid point that the gluten-free tax write-off may help people who could use the deduction to relieve financial burden and help to make economic ends meet.
I also like the fact that you bring up a stipend, a situation which is theoretically preferable to a tax write-off, since actual money in your pocket to offset cost (such as via a stipend) is worth more than that same dollar value written off your taxable income.
However, I strongly disagree with your complaint that “almost all GF products are devoid of any nutrition” and that this situation is unavoidable. If that’s the case, then I’d suspect you’re eating many of the wrong GF foods.
Best,
Pete
Hi PMRowley,
Thanks for sharing the info re: audits. There are, of course, many factors that influence the likelihood of an IRS audit, and this may be one of them. All the more reason to keep accurate and detailed records.
Cheers,
Pete
Hi Aleka,
Thanks for adding your experience writing off the cost of gluten-free foods. It’s great to hear from someone who has done it for years and who can share that perspective.
I wasn’t arguing both for and against the tax write-off. I began by listing some of the reasons in favor of it, and then offered my counter argument why I think the system is flawed. It’s a valid (and quite appropriate) practice to benchmark against what others have done (such as other countries’ approach to GF finances) to see what has worked and what hasn’t. Europe—and Italy especially—are often seen as out in front of the US on celiac issues (as evidenced by their standard celiac screening of all citizens), so shouldn’t we also look at how they approach the GF finance issue?
To say “it is what we have” and accept an imperfect solution—while better than nothing—to me isn’t an excuse to accept that system without calling for potential reform.
Best,
Pete
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I have Hashimotos Disease and was dealing with severe GI issues before diagnosis. It was highly suspected that I am celiac although bloodtests were normal. I adhere strictly to celiac protocol and absolutely cannot tolerate gluten in any form or fashion. Why can other diagnosese not get the tax deduction…i.e. other autoimmune illnesses when gluten has been found to cause symptoms and exacerbate these illnesses too??? Hopefully this will change.
I am new to this, but the tax laws that I have looked at do not seem to specify celiac disease. It seems that any medical condition that is offset by eating a special diet would be allowable under the law (IRS publication 502). But I have asked my tax adviser, since I am not an expert. My question is why most people seem to be looking at this expense in an isolated situation. I agree that it would be difficult to come up with 7.5% or over on just grocery deductions. But for me, with a family of five (two of which are gluten sensitive) the deductions, though a headache to be sure, make sense completely. My grocery bill has increased quite a bit since I started shopping for gluten free items. And I am not talking about unhealthy and processed foods. To be sure I buy some of them, but compare the cost of whole wheat flour ($1.99/pound) to sorghum flour, tapioca starch, brown rice flour and xanthan gum. I need all those flours just to make a recipe in which I used to need just whole wheat flour. The cost differential is quite a lot. Or compare brown rice pasta to whole wheat pasta. It is double the price: same nutritional value, just double the price. So, yes, I do think it is worth it. Even when you eat healthy, GF healthy costs more.
Yes, there is certainly room for dishonesty. But there is in most tax laws. That is why our tax system is outdated. But that is a comment for another post!
Cheers,
A mother
This is what I try to tell my friends who have Celiac disease–that they have to be very careful that they don’t end up being audited. Esp now, the IRS is really looking at tax returns and checking everything over double- and triple-time and going after people they think are gaming the system. Like with the “hobby” credit; it’s gotten so bad that trying to start a company/self-employment job (like me) is very, very difficult.
I don’t have Celiac disease, but I do have Gluten Intolerance; I’ve always been told this tax deduction is only for those with Celiac (so if that’s not correct, I’ll have to look into it more. By doctor, does that mean I can have a Naturopath write me a letter, stating I need to be completely gluten free? None of my allopathic doctors even touch anything to do with my Gluten Intolerance diagnosis; they are also completely clueless about our liver issue and are of absolutely no help there.).
After reading the “rules” one must apply in order to take this deduction, now that we have gone over to Paleo/Vegetarianism for our health, we no longer hardly buy any products that are processed and “gluten free”–meaning we pay EVEN MORE for our good food (pasture eggs are more, organic/grass-fed meat is more, wild-caught fish is more, superfoods (chia seeds, cacao powder, camu-camu powder, flaxseed, hemp seeds, sprouted pumpkin and sunflower seeds, raw organic/local honey, pure maple syrup, coconut sugar, organic nuts, chocolate chips that are free of the 8 allergens, etc. [all of which I try to buy organic]) cost more–living and eating better and GLUTEN FREE is extremely expensive if you want to eat organic, pastured, grass-fed, and wild caught so that you can stay away from toxins and pesticides, which cause inflammation in the body (as does highly refined flours).
So I’m not even sure the IRS would allow me to deduct anything at all.
Also, rather than buying and using the typical gluten-free flours for baking/cooking (which are highly processed (white) flours, which raise the glycemic index), we use coconut flour, almond flour, and buckwheat flour and very seldom arrowroot and tapioca flour (the last two we use to make panfried oven pizza). Haven’t made anything with pecan or hazelnut flours, but those are also expensive.
I understand that people with Celiac disease pay a lot for their food–but that is mainly because they buy processed gluten-free food, which are devoid of any nutritional value because they are dead foods/processed foods [most of them are; there are some that are made with sprouted grains; those are good]. But going over to eating organic vegetables, organic fruits, organic nuts and seeds, grass-fed meat, pastured eggs, and wild-caught fish and game is equally expensive. We do it so we can eat gluten free because of our Gluten Intolerance/IgA test scores–but we don’t have the option to deduct any of these expenses on our taxes.
We have made the choice of eating this way–well and healthy–for our body, for our health, because we have to (Gluten and Soy Intolerance as well as Casein Allergy–so we have to eat a whole bunch of different foods that are more expensive to buy; this includes sheep and goat products, which are very expensive–as well as organic, because of our genetic liver issues). That does not mean we aren’t hurting in the pocketbook or couldn’t use a little help paying the grocery bills. We’re going to start a garden this summer to help with the cost of produce; we are getting killed this winter with the price of vegetables.
I went back to school and am a Certified Holistic Health Coach, specializing in the liver: Autism Spectrum, CYP/P450 Cytochromes, and Phase 1 and Phase 2 Detoxification Pathways. Knowing what I know about the liver and how the body detoxifies and knowing that we have some genetic liver mutations is also another reason why we have completely changed the way we eat and have gotten away from eating as much processed/manufactured food as possible. If people only knew what the foods they are eating are doing to their bodies, they would think twice about putting it in their shopping cart.
Our food supply here in the USA is the worst in the world, bar none. And I won’t even get into GMOs or glyphosate or the artificial flavors/dyes or all the GRAS-approved ingredients in our food that are harming our gut microbiome. That is enough for a post all its own.
I had a thought about the costs issue that might help a little, since you mentioned the portions… I’ll use gluten free spaghetti noodles as my example (I don’t remember the actual costs though, so I’m guesstimating) a box of regular noodles is usually around $1-$2, but gluten free is around $4, all before sales tax… But there’s also usually less in a box of GF spaghetti, BUT, most chain grocery stores have cost-per-oz labeling on their shelves too (Walmart, Kroger, Food Lion, Publix, Dollar General… as a few examples), so that might help with breaking that down. So if you set up a picture folder on your phone and take a picture of the shelf-labels, it may better help organizing the mess of price differences. I’m new to the discovery of having celiac (after years of misdaignosises and pain, that have caused additional, irreversible health problems) so I don’t know how much this helps… I don’t even know if this applies to me since I live in the U.S., but I thought if it may help anyone else, it would be worth commenting
Thoughtful blog post ! I was enlightened by the specifics – Does someone know if my assistant could locate a template a form copy to fill out ?
Greetings Lavelle. my partner accessed a template Profit & Loss Statement Sample version here http://pdf.ac/6lVpm4