Is the gluten-free tax break broken?

Tax season is upon us! This year, even the IRS is procrastinating: because of last year’s shutdown, the opening date has shifted to January 31st, although free-filing opens today. But I never submit my tax forms until the very last possible moment, anyway. Instead, I spend every day till the drop-deadline thinking, “I should really do my taxes.”

Some people like to get it over with. Me, I prefer a constant, underlying, slow-burning stress culminating in a miserable, last-minute sprint to the finish line, followed by form letters from the IRS demanding I fix the sloppy errors I made. That way, I can enjoy tax season year-round. (Just another instance of that procrastination problem I’m working on.)

Since the deadline is April 15th, it’s nowhere near time for me to do anything about my taxes, but I’m at least thinking about them.

This year, my mind is on the gluten-free tax deduction (more info on that here). How worthwhile is it to count up my medical (including more expensive food) expenses, figure out if they exceed 7.5% 10% of my adjusted gross annual income, and file that extra piece of paper on the last day possible?

[Edit, 1/25: According to the IRS, it’s actually 10%, not the often-cited 7.5%, which applies only to those who are, or whose spouse is, over 65 years old.]

Since this was my year of diagnosis, I might be in a good place to qualify: My medical expenses included about a billion copays for doctor’s appointments and exams. A billion times $30 definitely exceeds 7.5% 10% of my income.

Plus, though I rarely buy packaged gluten-free food products, I do pay more for certified GF grains, beans, breakfast cereals, etc. I also buy staples with no direct analogue, like my largely unused package of xanthan gum, which are entirely deductible. (For items like sorghum flour, I’m less certain: there’s no direct analogue, but wheat flour is close. Anyone know the deal?)

If my record-keeping last year had been a little more organized than stuffing all of my receipts into my tote bag, allowing the tote bag to get rained on, then throwing out the mass of soggy paper, I could tell you if those extra pennies added up enough.

But I know I’d hit the benchmark if I could add in other hidden costs of a gluten-free diet that the law doesn’t address. For example:

  • The difference between the cheapest beer and the cheapest GF drink choice at every bar. This is always at least $1, and at Housing Works I recently paid $7 for the house white—more than double the price of a $3 PBR. At least it went to a good cause.
  • All the chocolate I’ve had to buy myself when I feel sad about having a disease
  • My smartphone, whose purchase I justified primarily to be able to research foods on the fly (though I use it for way more)
  • Gluten-free restaurants, which are always, always, always more expensive than the restaurants I used to frequent
  • Any of the far-too-generous number of dollars family and friends have laid out to allow me to feel safe eating at their homes
  • The all-new pans, containers, utensils, pantry staples, etc., that I bought in case the old ones were contaminated
  • My time—which is money, if not all that much in my case—spent:
    • Cooking my own meals, even when I really, really want takeout
    • Reading package labels, researching online, and calling manufacturers directly
    • Explaining to people why I can’t eat X, Y, and Z
    • . . . and why I can still eat Q, R, and S
  • Damages for my years spent sick, miserable, and undiagnosed

All that considered, I’d only really be happy paying no taxes at all—a gluten-free free lunch—or, maybe the government could pay me to be gluten-free. After all, improved health makes me a more productive member of society. The eligible write-offs don’t even begin to cover it.

Is that so much to ask? (Throw in the NCGS folks, too, whydoncha.)
Original photo @ Darya Mead | Flickr

Of course, I know everyone has to make purchases they wish they didn’t, spend time doing stuff they’d rather not, and generally speaking lead a life that doesn’t allow for enough pursuit of happiness. Having celiac disease isn’t the worst way to have to do all that, and, without getting too far into politics here, I’m happy enough to pay taxes in theory (in practice, I wonder where they’re all going).

Though I’m not sure it’s entirely “broken,” I probably won’t go for the deduction this year. There’s a good discussion of how worthwhile it is on No Gluten, No Problem, which helped talk me out of it. Even if I dug through my bank and Amazon records for something approaching receipts in the case of an audit and tallied it up, I’m not confident I’d find the gluten-free tax break worth my time. Besides, I don’t pay a lot of taxes anyway. I’ll just do what I do best and think about it instead.

Do you apply for the gluten-free tax deduction? Will you this year? Are you a procrastinator or an early bird? And what hidden costs of gluten-free get on your nerves?

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19 thoughts on “Is the gluten-free tax break broken?

  1. lisamims says:

    I’m just picturing an IRS agent getting into the medical records. I have a positive biopsy, but a negative genetic test. (They only test for 3 of 75 markers.) I think this only works if you have all the right parts in the diagnosis. I’m not arguing that one with the IRS.

    • Molly says:

      You don’t need to submit it with your tax forms, but if audited you need a doctor’s note. If your physician will write a prescription to eat gluten-free, I believe that counts just fine (the IRS has no idea what the “gold standard” for celiac disease diagnosis is, I’m sure). It’s rough for people whose docs won’t pay attention to them or recognize the problem.

  2. Yes I have run into this with my organics (doctor says I need), my special shampoos, my special water, etc. What I finally did because I don’t want to figure out the regular price of an organic tomato/vs regular tomato and keep track of that difference (which is what can be written off). I now just deduct my water (which is expensive) and it is easy because tap water doesn’t have a charge attached and my supplements, and certain other things. It was just too crazy and I don’t have the energy to keep up with it all. Although my almond flour is way more expensive than regular flour.

    • Molly says:

      Yeah, it’s a case of diminishing returns, to me. I’m afraid of putting in the work now to try to figure out how much I spent and realize it’s not enough to break past the threshold. But are you saying you can write the water off even if it doesn’t put you over 7.5% of your annual income? I may have misunderstood that, if so.

  3. Maria says:

    Well, I didn’t even know there was such a thing. Stuck with plain old intolerance (which is real) but no celiac diagnosis, I guess it is beyond my grasp if I were to have to file. But very interesting to know about. Thanks Molly!

  4. Vik says:

    I’m impressed when anyone does their own taxes. I schedule an appt to get them done and it is SO worth it. Tend to procrastinate on grownup stuff but not taxes, the anxiety (of the procrastination plus fear that I’d do them wrong) would be too much. I won’t go for the GF deduction. You did a swell job of listing all the annoying hidden costs of GF, plus the up-fronts. Isn’t it amazing, how much time each diagnose-ee has to spend researching safe food? And,hey, where do you get your GF beans?

    • Molly says:

      Ha, thanks, Vik! My dad used to do them for me when I was in college, which was considerably less stressful for me. 😉 It really is amazing (in a bad way) how much time this sucks away. I guess if you’re happy to just eat the same things over and over again, it’s easier, but that’s so boring!

      We’ve been buying GF beans and lentils from Shiloh Farms, but sadly they just discontinued their line of certified GF legumes. I think they intend to reinstate it, with different suppliers, but I’m not sure when. Arrowhead Mills and Nuts.com both have small selections of GF beans.

      Mostly, we just go with Goya canned beans, which according to the company are not contaminated by gluten because they’re processed alongside vegetables and fruits rather than alongside grains.

  5. Everything about this dang celiac gets on my nerves. 🙂 But I love your inclusion of chocolate on the ‘should be a deductible’ list.

  6. John says:

    I’m in Canada where we have a similar GF tax break and I have to say that the 7.5% “deductible”, if I’m understanding it correctly, seems rather high. It’s only 3% here and applies, as is apparently the case in the US, to one’s overall medical expense, of which the claim for the incremental GF expense is part. I thought even 3% was kind of high in terms of being able to get any money back. Then again, I try to avoid most (and note caps here) Gluten-Free food (in favour of the ineligible but naturally gluten-free stuff) so I’m not likely to qualify for much of a rebate at any rate, but I do understand this option isn’t always as accessible for everyone else.

    Is the 7.5% an amount for filing as individuals or as couples (can’t do that here, everyone has to file by themselves)? Since we don’t have the joint filing thing, the common (and completely legal) thing to do up here (assuming you’re part of a couple) is to have the lower-income partner claim ALL medical expenses for BOTH partners combined to lower the deductible and max out the rebate. Not sure if this is possible in the US.

    As for claiming flour and xantham gum, if it were me, I’d use the price of either regular white or whole wheat flour as the base cost (because more than likely that’s what you’d be buying instead if you weren’t GF) and I’d claim the FULL cost of the XG, because that’s something you prob wouldn’t be buying at all otherwise. The *incremental* cost, which is what really matters as I understand it, happens to be the *entire* cost in this case. Just my opinion, I’m not a qualified tax expert.

    • Molly says:

      John, I have to admit your questions went way over my head! That said, I’ve looked into it and realized that my 7.5% figure may have been outdated, because the IRS states the total medical expenses must be over 10% of “adjusted gross annual income,” so it’s even harder than I thought. (7.5% applies only if you or spouse is over 65 years old, which in many ways does not apply to me.) The expenses inclose those that “you paid that year for medical and dental care for yourself, your spouse, and your dependents.” Here’s a link to the IRS site with info on this. I’ll have to edit this post so as not to perpetuate the 7.5% figure.

      I think you’re definitely right about the xanthan gum (even though I too am not a qualified tax expert, or even close). And probably correct that brown rice flour, etc., should be compared to regular flour. I think it’s all a little too much work for me personally to try to figure out at this stage, but I applaud anyone who is organized and diligent enough to do it.

      • John says:

        Yes, I was looking at Gluten Dude’s FB page since I wrote the above and I saw people kicking around a 10% figure, saying that it was boosted for the latest tax year apparently. I can’t see how anyone’s ever going to get a rebate under these circumstances. It would likely have to be a case of an entire family of at least 3 or 4, with all having the right medical documentation, before you can even think about breaking even.

        On the other hand, I think there’s room for a debate about whether it would be a good thing if this tax break were more generous. I’m kind of conflicted. As I understand it, it only covers GF foods that are intended as replacements for some other non-GF foods. My personal opinion is that many of these foods (not ALL — I really like some of Nature’s Path’s GF cereals, for example) are not the healthiest things to be eating to such an extent that governments subsidise their consumption, and that more focus should be placed on naturally GF foods. So if the existing policy acts as an incentive toward this direction then maybe this would be a good thing.

        Where the problem arises is in the big time crunch; many naturally GF foods require preparation time that many of today’s increasingly dual-income families simply don’t have.

        Which brings me to a larger question re: society’s values. I feel like the food industry has been selling all of us (GFers and non-GFers alike) a lie about food. Let’s acknowledge here that food is first and foremost fuel for our bodies. I’m not saying it can’t or shouldn’t be pleasureable, but it’s not like this was ever carved in stone. Exercise is an equally important in keeping ourselves healthy, but nobody ever said that was easy, either.

        With so many so-called “convenience” foods (GF or not) on the market today, it’s like the food industry is selling us this false notion that food doesn’t really deserve that much of our time: why waste time cooking and baking when you could be watching the latest silly youtube video? We’ve lost sight of the fuel fact and psychologically re-framed food as merely this thing that’s just meant to fill a void. Our post-WWII society has collectively bought into this line of thought and we’ve reaped an epidemic of diet-related maladies while we seem to be spending less time than ever on food preparation.

        Maybe we need to re-prioritise as a society and allow ourselves more time to focus on the role of food in our lives, and less time on the stuff that in the long run, doesn’t really do us much good. Perhaps we’ll reach a point where we have no choice but to do so; maybe some of us already have.

        • Molly says:

          John, just wanted to say what an incredible comment this is. I’m going to refer to it in a future post to be sure other people read it! I completely agree. It’s very unfortunate that so many people either don’t have time or don’t feel they have the time to cook. There are all kinds of issues feeding into that and in turn helping to feed us junk.

          It’d be great if society as a whole could reprioritize, because as is, it can be difficult for individuals to change their habits (I’m thinking especially of people who need to work very long hours just to get by and support their family). Increasing wages, cutting back on hours, and providing better support to parents would be a pretty fantastic start. (Changing the food industry is a whole other story!) Whoops, my socialism is showing. 😉

          • John says:

            Hi again Molly,

            I saw your last comment above not long after you wrote it and I’ve been meaning to reply ever since.

            First, I wanted to extend my comparison of the US/Cdn systems. I went from memory in my other comments but having since reviewed my own taxes, some other pertinent details came to mind.

            I said that our deductible was 3% of income but what I didn’t mention was how they reimburse expenses above this. Naively, and I might have given this impression, one might think it’s just dollar-for-dollar payback above the 3% threshold, but this is NOT true. In fact, you only get back 15 cents on the dollar (that’s on the federal level… there’s also a smaller refund on the provincial level that varies typically from 5-10c on the dollar depending on province).

            If this is too abstract to follow, here’s an example: take someone with $50k income and $1600 in med expenses. Their 3% deductible is 0.03 x $50,000 = $1500, which leaves an eligible claim of $1600 – $1500 = $100. From this, only 15%, or $15, is refunded. There’s an extra $5-10 at the prov level, so around $25 max, or barely 1.5% of the total incremental expenses of $1600. Not exactly a windfall!

            That’s just the way that not only med expenses, but pretty much all of our various tax credits work: they don’t usually have deductibles, but whatever the claim amount, they only refund you at a rate equal to the lowest income tax bracket rate (which can vary and happens to be 15% these days, and it’s the same idea at the prov level where inc tax rates are lower).

            I thought I’d mention this since my previous reaction was that the US system with 10% deductible seemed a lot less forgiving than the Cdn one. I checked the IRS link, but couldn’t see if it’s dollar-for-dollar compensation beyond this rather than just so many cents on the dollar. If it’s better than 15%, then perhaps our respective systems might be, if not completely equitable, at least more so than I thought.

            ****

            Also, we were speculating that the full cost of XG can be claimed; I found this link that agrees with us:

            http://www.celiaccentral.org/shopping/tax-deduction-guide-for-gluten-free-products/

            Check step 3: “Products like xanthan gum and sorghum flour are completely tax-deductible as they have no “regular” counterpart but are purchased to meet your dietary needs. Shipping costs for online purchases are also permissible deductions.”

            I have some other thoughts/comments but I’ll put these in a separate post.

          • John says:

            I also wanted to comment about enacting social policy to support good dietary habits. It’s a pretty complicated issue. I would consider myself conservative (by Cdn standards anyway, FWIW) but I don’t know if a purely ideological approach whether left or right would help.

            Increasing wages and cutting back on hours sounds ok by itself. But ultimately it means the rank-and-file folks who bake GF bread for Udi’s and who truck all those organic fruits and vegetables to the local produce store would also be in line for these benefits, which would in turn drive up the price of such goods and put things back to square one.

            Conversely, it would be easy to say “women belong in the kitchen” and go back to the 1950s when everyone woke up (and came home) to a wholesome, home-cooked meal but this just isn’t practical at this stage of the game, either. I think the solution (if there is one!) will have to come ex nihilo, absent of any particular politics, so I’d just as soon put aside such differences and focus on commonalities.

          • John says:

            Ok, one final comment, unrelated to everything else I’ve said today, but I think this blog post would be a good place to mention it nonetheless:

            H&R Block are a steady fixture on the current tax-season advertising landscape, and one of their current TV ads here in Canada captured my attention.

            It starts with two 20/30-something women seated together in a cafe talking.

            W#1: “Oh, I wanted to tell you, I got rid of the pain.”

            W#2: “You went gluten-free?”

            W#1: “Nope.” (Holds up a clearly labelled H&R Block envelope) “Found H&R Block.”

            W#2: “Smart.”

            … and from there it cuts away to a voice-over, standard ad copy on H&RB greatness. I tried to find it online, but no luck. I’ve only seen it randomly embedded as a pre-play ad to other videos, so can’t link it. The closest reference otherwise is in the link below. This ad is one in a series of their “Tax Pain”-themed campaign they’ve run the last few years and only seems to be airing in Canada (because apparently, as this article says, taxes are considered merely a nuisance up here rather than an object of fear, so presumably such ads wouldn’t resonate with an American audience).

            http://www.marketingmag.ca/news/marketer-news/hr-block-brings-back-tax-pain-campaign-100531

  7. rachelmeeks says:

    The cost of chocolate for spoonie depression is TOO DAMN HIGH! (let’s be a political party)

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