If you’re like most people, it seems at times like you turn your entire paycheck over to the grocery store. For parents feeding growing children, it can certainly be tempting to use that as a tax deduction. However, you already get credit for your dependents in other areas when you’re filing taxes. But even though you can’t deduct the general expense of feeding your family, there are instances when you can hand your grocery receipts over to the IRS.
Any groceries which you have purchased for personal consumption or use cannot be claimed as a tax deduction. One of the only exceptions to this rule is if the groceries were purchased as part of a medical prescription.
As with other expenses, groceries may be tax deductible if you’re purchasing them for work-related purposes. If your boutique has an open house for customers, you can write off the food you serve as a business expense. Daycares can also take a deduction of 100 percent of the actual food consumed by the children in their care and 50 percent of the food employees eat. There is a standard meal and snack rate that daycares must follow.
However, in some cases, your food expense will only be 50-percent deductible. If you purchase doughnuts for your Monday morning staff meeting, for instance, you can only claim half of the cost. A food deduction can be a red flag for the IRS, so make sure you keep your receipts and follow all requirements to the letter.
There are instances in which groceries are tax deductible when connected to medical care. If you’ve been diagnosed by a physician with a health condition that requires a special diet, you may be allowed to deduct the cost of a weight-loss plan. That normally doesn’t include food or beverages, but there is one major exception. If the item you’re purchasing doesn’t satisfy normal nutritional needs, helps treat the illness and has been substantiated by a doctor, you may be able to deduct the cost.
If a patient requires an in-home nurse, the portion of food that goes toward that attendant’s meals can be deducted. Also, if your medical assistance comes in the form of a medically-prescribed service animal, you can deduct the food you buy for that animal.
Particularly during the holiday season, charitable contributions can often involve food. If you purchase food to donate to a local food bank, for instance, you can save your receipts and claim the donation on your taxes. However, the donation must go to an IRS-approved charitable organization. The IRS maintains a list of acceptable nonprofits on its website.
For personal donations, though, it’s important to note that you’ll likely need to exceed the standard deduction for your contributions to matter. Now that the standard deduction has increased to $12,000 for single taxpayers and $24,000 for married couples filing jointly, many more taxpayers will find that itemizing isn’t worth it.
Sales Tax Considerations
Of course, you’re probably already getting a tax break on your groceries, depending on where you live. In most states, groceries are exempt from sales tax, so you’re only paying for the cost of the items themselves. In some states, you’ll pay sales tax on groceries, but at a reduced amount, such as Missouri’s grocery tax of only 1.225 percent.
Even if your state exempts tax on groceries, though, there may be some exceptions. In Georgia, you may pay local taxes but there isn’t a statewide tax imposed on groceries. In Colorado, you’ll enjoy a tax-free shopping experience unless you buy carbonated water, candy, soft drinks and a few other items. In some states, you’ll also pay tax on precooked items you find in the deli or at a grocery store’s salad bar.
- Mark J. Kohler, M.Pr.A., C.P.A., J.D.: Writing Off Dining and Food Expenses in 2018 – Master Chart of Options
- IRS: Business Use of Your Home (Including Use by Daycare Providers)
- IRS: Publication 502 (2017), Medical and Dental Expenses
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
- TaxJar: Sales Tax By State: Are Grocery Items Taxable?