The Cost of Allergies - Uncle Sam Give Me a Break!

As your mom - I manage most of your health and so I know how expensive all this can be and those costs can add up really quickly, and we have reasonable health insurance. 

From the steep $600+ for an Epi-pen to thousands of dollars each month on food suitable for your long list of allergies and doctor appointment visits to ambulance rides and hospital stays. The costs are high and climbing.  Since I am a CPA, I often get questioned on taxes and credits, etc. The short answer is, I have no idea about taxes! Well I know enough to be dangerous and hold a conversation at a cocktail party. But this got me thinking, are any of the costs related to your allergies deductible?

I did some digging and the answer is Yes! And no.

First, what can we deduct:

• Co-pays
• Transportation costs, including mileage, using the standard mileage rate
• Parking 
• Overnight stays
• FOOD!

Yes, you read that right. The costs of special food can be deductible. The food must meet certain criteria. Those criteria include:

• The food must not be used to satisfy normal nutritional needs;
• The food must alleviate or treat an illness; and
• The need for the food must be substantiated by a physician

"The amount you can deduct as a medical expense is limited to the amount by which the cost of the special food exceeds the cost of a normal diet.  So, for example, if you buy special flour that costs $7/bag because of a wheat allergy and regular flour is $5/bag, you can only include the difference ($2) for purposes of calculating the deduction.  In other words, you cannot deduct the cost of all of your special food; you can only deduct the difference between the cost of your special food and your "normal" food.  If there is no such "normal" equivalent, however, the entire cost of the product is deductible."

Keep records to substantiate the claims. The expenses may be subject to phase outs, eligibility requirements and other limitations and we can only deduct those expenses which exceed 10% of our adjusted gross income (AGI).

What you cannot deduct:

• OTC medicines, even if doctor recommended, example: Motrin
• Non-prescription based personal care products, example: oatmeal bath, creams

The big take-away here is to track all of our expenses all year and if we meet the 10% floor of our AGI, we can start deducting.