Deductibility of Cloth Diapers


Deductibility of Cloth Diapers

As a CPA currently working as a full-time mom to my twin girls, I have really enjoyed being able to put my accounting skills to use for the Real Diaper Association for a cause I am so passionate about. As the new Treasurer, I was very excited that right from my first meeting I was able to help out by researching a couple of tax related cloth diapering topics.

The first of these issues was whether or not parents had any support for deducting the cost of cloth diapers. It turns out that the issue is pretty clear cut and some very specific rules exist.  If cloth diapers have been prescribed for the "treatment of a disease", then parents can pay for them with funds from their flexible spending accounts or take their cost as  medical expense deduction. I got this information from IRS's  Publication 502, "Medical and Dental Expenses". Anyone who would like more information can find this publication at irs.gov or should discuss this with the tax adviser or plan administrator. We'll be adding this information to our Real Diaper Facts at realdiapers.org to help make parents aware of this potential tax savings if they're in this situation.

I hope this will be the first of many opportunities I'll have to share (what I hope is) helpful tips with other cloth diapering parents.

Comments

  • by
  • Jun 12, 2009
Do you have to provide documentation from your doctor showing that cloth is necessary for treating a disease? Thanks for researching this!!
You don't have to include the documentation with your tax return when you file it, but you should have that documentation on hand in case you are ever audited. You may also be required to provide documentation to the manager of your cafeteria plan if you are trying to use money from the plan.
  • by
  • Jun 12, 2009
So do you just mean having an actual diagnosis of being allergic to disposables?? I personally believe disposables are dangerous to the health of ALL babies, but I love that its possible for some to get a tax break on it. Wish I had known this about 3 weeks ago and I would have talked to my doctor about getting documentation. Will def be remembering this for next year tho! Glad to know I should be saving my receipts on my cloth purchases

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