August 14, 2018

Gym Membership Tax Deduction Possibility

We all know how important exercise and physical fitness are for good health. Wouldn’t it be great if we could include sports and fitness in our deductible healthcare expenses? Well, that may happen if a Congressional committee has its way. The U.S. House Ways and Means Committee has reported out a bill that would allow taxpayers to deduct fitness facility and gym class fees as a medical expense.

The bipartisan bill adds sports and fitness expenses to the definition of qualified medical expenses. The bill includes membership in a fitness facility, participation or instruction in a program of physical exercise or activity, and safety equipment for use in a program (including a self-directed program) of physical exercise or activity.

The deduction would be limited to $500 for an individual taxpayer, or $1,000 for married filing joint returns or head of household. The deduction for safety equipment is limited to $250.

Under current law, medical expenses must exceed 10% of a taxpayer’s adjusted gross income for them to be tax deductible. However, under the legislation, health savings accounts and flexible spending accounts could be used to pay for gym memberships and fitness classes.

There are limitations and the bill would still need to pass the full House and Senate and be signed by the President before it becomes law. We will have to see if everyone can agree, but it’s an interesting sign of new thinking on taxes.