March 26, 2010

Tax Deductions for those who suffer from Cystic Fibrosis

Cystic Fibrosis and Tax Rules

So anyone who has cystic fibrosis (CF) )or a dependant that does know food expenses can get to be very expensive. It is actually considered a medical expense and can be added to such. If that expense, the monetary amount over which an average individual consumes, works out to be over 7.5% of your total gross income it is tax deductable. It’s no secret that CF patients are required to eat special foods and that they two to three times more as well. So this tax tip may be the most useful one for CF households.

What to Know
The tax law states that “only the portion of expenses that exceeds the amount a healthy person spends on food is deductible” and the IRS means business on this one. So if you plan on itemizing and using this one too, keep documentation of actual expenses including medical and nutritional needs.

Keeping the Records
First I would advise you to speak with a nutritionist at you or your child’s CF care center. They will be able to give you a written quantified confirmation of the needed expense. These will/should include: amount of food needed, type of caloric or food supplements amounts needed(ie MCT oil, Portagen, Ensure etc.), why it is necessary, and the consequences on deviating from specified dietary plan.

You are going to need to start a system of recording food costs used by the patient. It’s not as bad as it sounds. The payout is worth it too. All you need to do is keep food records for two weeks and then use that as a standard for annual costs. Just make special notes when higher-cost foods are bought out of requirement. You are also going to need something to compare these numbers to. So keep a running account of what a healthy individual of the same age/sex would need. This is a good resource:

Cost of nutritional needs for healthy individuals prepared monthly by the U.S. Department of Agriculture
http://www.cnpp.usda.gov/Publications/FoodPlans/2009/CostofFoodJan09.pdf
This USDA chart assumes that food for all meals and snacks is purchased at the store and prepared at home. In addition, the costs given are for individuals in a family with 4 people. The following changes are suggested for other family sizes.

  • 1 person family, add 20 percent
  • 2 persons, add 10 percent
  • 3 persons, add 5 percent
  • 5 or 6 persons, subtract 5 percent
  • 7 or more persons, subtract 10 percent

This information is important for providing a way to compare the kind and amount of food purchased for, and consumed by, a person with CF. If you require more information, please contact your CF care center or the CF Foundation's National Office for assistance.

If you have decided to claim a tax deduction for food purchased for a person with CF in your family, you should know about the law regarding this particular tax benefit.

Section 213(a) of the Internal Revenue Code, states:

“(a) Allowance of deduction: There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152), to the extent that such expenses exceed 7.5 percent of adjusted gross income.”
Section 213 (d)(1)(A) defines “medical care” as “amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.”

If you’re not certain about your household’s eligibility for this deduction or have more questions, first consider talking to your CF care center and then to your attorney, a licensed tax accountant, or an IRS consultant.

Find out more about tax deductions at TaxFiling.net