chartered accountant

Can I get a tax deduction for eating gluten-free food?

If you suffer from celiac disease, you may be eligible to get a tax deduction for eating gluten-free food. Here is advice from a Toronto Chartered Accountant.

According to the Canadian Celiac Association, it is estimated that 1 in 133 persons in Canada are affected by celiac disease (gluten intolerance). Currently, there is no known cure for this disease, yet it can usually be effectively treated and controlled with “strict adherence to a gluten-free diet for life”. This requires knowledgeable dietetic counseling and frequent ‘updates’ as commercial food contents change.

Gluten-free products could be quite expensive and the Canada Revenue Agency (CRA) is aware of this. If you suffer from celiac disease, you may be eligible to claim the incremental costs related to purchasing gluten-free food as a medical expense.

What is the incremental cost? And how is it calculated?
The incremental cost is defined as the difference in the cost between gluten-free products compared to the cost of similar products containing gluten. It is simply calculated by subtracting the cost of a product with gluten from the cost of a gluten-free product.

For instance, if a gluten-free loaf of bread costs $5.50 and a loaf of whole wheat bread costs $3, you could write off $2.50 as a medical expense on your income tax return.

What if several people are sharing gluten-free products with me, yet I am the only one who has celiac disease?
According to the CRA, “if several people eat the product, only the costs related to the part of the product that is eaten by the person with celiac disease may be claimed as a medical expense.” For example, if you split your loaf of gluten-free bread with a friend or your spouse, you may only claim half of the expense or $1.

What documents do I require to support the claim?
The CRA states, “Do not send any supporting documents. Keep them in case we ask to see them later.”

You will need to keep all of the following:

  1. A letter from a medical practitioner that certifies that you have celiac disease and cannot eat gluten.
  2. Receipts for each gluten-free food product to backup all your claims.
  3. A summary of each food product that was bought during the 12-month period for which the expenses are being claimed.

What is an example of ‘a summary of each food product’?

Food product: Bread
Number of products bought (for the 12-month period): 52
Average cost of product with gluten: $3.49
Average cost of gluten-free product: $6.99
Incremental cost: $6.99 – $3.49 = 3. 50
Amount to claim: $3.50 x 52 = $182.00

This table is based on a sample provided by the CRA website.

Here is a celiac disease medical expense worksheet. It is intended to help you document your gluten-free purchases. It is beneficial to print several of these sheets off and keep a file with this worksheet and your receipts together. This worksheet was taken from the Canadian Celiac Association.
In summary:

  1. The incremental cost of gluten-free products is an eligible medical expense.
  2. Eligible products are generally marketed specifically to the gluten free diet.
  3. Other products can also be eligible if they are used by the person with celiac. disease to make gluten-free products for their own use. These include, but is not limited to, rice flour and gluten-free spices.
  4. The gluten free tax deduction is only eligible with a medical note with a diagnosis of celiac disease.
  5. A summary of each purchase of gluten free products must be kept on file.
  6. A receipt for each purchase must be kept on file as well.

Related: Eligible medical expenses you can claim on your tax return


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

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A Chartered Accountant advises parents on how children could become more financially literate

As a Chartered Accountant, many of my clients ask me how they could help their children become more financially literate.

As a Chartered Accountant and parent, I could understand why they are concerned. Being financially literate is a life skill that children will carry with them even after high school. They need this knowledge in order to responsibly file their tax returns, help pay off debts and credit cards and save for their future. Lacking financial skills could definitely lead to financial troubles.

The good news is there are many different initiatives across Ontario that are helping children and youth gain money skills. For instance, the Ontario Ministry of Education is engaged in a pilot project that is helping revamp the Grade 10 careers courses and is laying the groundwork for financial literacy to become part of the curriculum for the fall of 2018.

Also, findings released this week by the Organisation for Economic Cooperation and Development (OCED) reveal that Canadian youth are among the top global performancers in financial literacy. Canada came second in financial literacy out of 15 countries that participated in the Programme for International Student Assessment (PISA) survey. Eighty-seven per cent of about 3,400 Canadian students who participated in the survey, demonstrated at least a baseline level of financial literacy and Twenty-two per cent of Canadian students demonstrated advanced levels of financial literacy, well above the OECD average.

What could you as parents do to help your children gain money skills?

I recommend talking with your children about money early on and doing so as often as possible. In fact, the PISA survey revealed that Canadian students who discussed money issues with their parents tended to score higher with those discussing money issues at home once or twice a week scoring the highest.

As a Chartered Accountant, from my experience, it is also beneficial for parents to encourage their youth to start handling money early on that way the youth gain greater practical knowledge on how to budget, save and spend wisely. In fact, the PISA survey found that Canadian teenagers who held occasional jobs like gardening and babysitting had, on average  the highest financial scores. Children and youth learn about money by doing. Here is an example of about 100 summer jobs for teens, one of them might peak your children’s interest.

What unbiased resources are out there that could help us parents discuss money matters with our children?

Chartered Professional Accountants Canada (CPA) offers free unbiased financial literacy sessions to the general public. The program is run by Chartered Accountants that volunteer their time and expertise and is available to adults, seniors, workplace, new Canadians, schools, post-secondary students, small and medium businesses and entrepreneurs. For instance, some of the topics that parents could learn at the sessions are how to teach their kids to be money-smart and how to become good financial role models for their children. If you are interested, you may request  a session here.

Another informative website is Teaching Children About Money which offers many programs and activities for youth and children. Some topics discussed are:  “What to consider when deciding to give an allowance: how much to give, how often to give and if it should be earned” as well as “What to teach your preschool, school-aged, preteen and teenaged children about money management.”

There is a also a Financial Literacy Database for Canadian parents which offers some educational and fun resources such as how to teach children about money management in a fun and interactive way, how parents could save for their children’s education and an e-book on how children could learn to be smart spenders.

Also, besides teaching children and youth about the value and importance of money and helping them take on seasonal jobs early on, it is important for parents to attend financial literacy workshops. Such workshops will give parents more confidence in their knowledge and skills about money, help them be better role models when it comes to handling money and make them feel more comfortable to initiate such conversations at the dinner table.

If you require additional consultation or a tax planning strategy, please do not hesitate to contact:

Polina Presman, CPA, CA

T- 416-371- 6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Sources:

https://www.thestar.com/news/gta/2017/03/23/ontario-launches-plan-to-teach-high-school-kids-financial-skills.html

https://www.cpacanada.ca/en/the-cpa-profession/financial-literacy/financial-literacy-program-faqs

http://theprovince.com/opinion/op-ed/opinion-canadian-students-among-top-global-performers-in-financial-literacy

https://itools-ioutils.fcac-acfc.gc.ca/RDCV-BRVC/sear-rech-eng.aspx

https://www.thepennyhoarder.com/jobs-making-money/100-summer-jobs-for-teens/

https://www.canada.ca/en/financial-consumer-agency/services/teaching-children-money.html