<<Disclaimer: Verify this information before applying it to your situation.>>

This was sent to me and I thought it was quite interesting.

This appeared in the American Celiac Society newsletter, Winter '92.


Tax Deduction for Gluten Free Foods as a Medical Expense

1.  You can claim only the EXTRA COST of the Gluten Free products over
what you would pay for the similar item at a grocery store, i.e., if
wheat flour costs $.89 for 5 lbs. and rice flour is $3.25 per 5 lbs.,
the DIFFERENCE of $2.36 is deductible.  You may also claim mileage
expenses for the extra trip the Health Food store.  You can also claim
postal costs on Gluten Free products ordered by mail.

2.  The cost of XANTHAN GUM (& methyl cellulose) used in GF home baked
goods is completely different than anything used in an ordinary recipe,
so in the opinion of the IRS, the total cost of this item can be
claimed.

3.  Save all cash register tapes, receipts & canceled checks to
substantiate your GF purchases.  You will need to prepare a list of
grocery store prices to arrive at the differences in costs.  You need
not submit it with your return, but do retain it.

4.  Attach a LETTER FROM YOU DOCTOR to your tax return.  This letter
should state that you have Celiac Disease and must adhere to a Gluten
Free diet for life.

5.  Under MEDICAL DEDUCTIONS list as "Extra cost of a gluten free diet,"
the total amount of your extra expenses.  You do not need to itemize
these expenses.

SUGGESTIONS:  You may want to write the citations (as given below) on
your tax return.  Always keep a copy of your doctor's letter for your
own records.

  Your IRS office may refer you to Publication 17 and tell you these
deductions are not permissible.  IRS representatives have ruled
otherwise and this is applicable throughout the US  Refer them to:
CITATIONS:  Revenue Ruling 55-261; Cohen 38 TC 387; Revenue Ruling
76-80; 67 TC 481: Flemming TC MEMO 1980 583; Van Kalb TC MEMO 1978 366.


While it seems pretty straight forward, we (my husband is an accountant)
found it's not of much benefit unless your medical expenses are very,
very high AND your income is very low because:

1.) Medical expenses are deductible only if you itemize, and

2.) Only those medical expenses in excess of 7.5% of your adjusted gross
income (AGI) are deductible.  Medical expenses up to 7.5% AGI are not
deductible.

Unrelated to the income tax issue, an older member of our group was able
to use the "additional cost of a g.f. diet" as part of his medical
expenses to qualify for assistance from the county/state. His financial
status and normal medical expenses alone were not quite enough to meet
the requirements, but the extra expense of maintaining his diet added
enough extra cost to make him eligible. While it didn't improve his
financial position, it did provide him with some extra medical care and
services, like snow removal, which have improved his quality of life and
allowed him to live independently and maintain his gluten-free
lifestyle. This might be helpful for other seniors in the same
situation.

Now is the time to start keep records if you think it will make a
difference next year at tax time...Bev in Milwaukee