Tax-Time Tip: Gluten-Free Costs May be Tax Deductible
(HealthCastle.com) It's income tax time again, so I thought I'd share one tip you may not know about that could help you save a few dollars on your tax bill. If you're a diagnosed celiac patient, you can claim the "incremental cost" of gluten-free products as a medical expense. Read on to learn what that means – and if you're eligible to make the claim.
What is the "Incremental Cost"?
Put simply, the incremental cost is the additional amount it costs to buy a gluten-free item instead of a regular item. Let's say a regular box of cereal costs $4.99, and a box of gluten-free cereal costs $6.99. You can claim only the extra amount: $6.99 - $4.99 = $2.00.
You'll need to keep your receipts in order to make your claim – and you'll also need to figure out how much less you would have paid for a regular item so you can figure out the incremental cost.
Who is Eligible to Claim the Incremental Cost of Gluten-Free Products as a Medical Expense?
Because this is a medical expense claim, you are only eligible if you are a diagnosed celiac patient. You will need to have a letter from your doctor confirming that you have celiac disease and that you require gluten-free products.
How Much Can You Save?
Unfortunately, this tax credit is not going to save you a fortune on your taxes. According to Coquitlam-based accountant Karen Mori of Karen Mori & Associates Ltd, "The problem with claiming medical expenses on your personal tax return is you need to have more than a total of 3% of your net income (or $2,109 for income of $70,300 and over) for it to even start to be a tax deduction. Unless they have other medical expenses that they need to pay for, they might not have enough to claim."
So, if you have no other medical expense claims, you're not likely to spend enough money on gluten-free products to qualify for the deduction. But if you do have other medical expenses, your gluten-free costs could push you over the minimum required for the deduction.
Since you never know how much your medical expenses will be in any given year ahead of time, you might find it's worth saving your receipts for gluten-free products so you have them on hand if it ends up being worth your while to file the claim.
More Details from the Canada Revenue Agency
If you have a tax professional prepare your taxes, you can ask them for more information about this tax credit. The CRA website provides more information about the gluten-free products credit and the medical expenses credit.