- A bill that was voted out of committee on Thursday would give favorable tax treatment to things like exercise classes and workouts at the gym.
- If the measure were to become law, taxpayers could use qualifying costs toward the medical expense deduction, which is one of the remaining few tax breaks for individuals. However, you must itemize to get the deduction.
- People with a tax-advantaged health savings account or flexible savings account would be able to use the funds toward the qualifying fitness costs.
Just months after eliminating most tax deductions for individuals, congressional lawmakers have advanced a bill that would make some fitness expenses a write-off.
Gym memberships and certain other exercise costs would qualify as medical expenses for tax purposes, under legislation that cleared the House Ways and Means Committee on Thursday. The break for eligible health care costs is one of only a few deductions that remains since new tax law took effect this year.
Also covered would be safety equipment used in an exercise program, whether in a formal setting or self-directed. The bill specifically excludes some activities and expenses, including golf, sailing, hunting, and exercise books or videos.
The tax break would be limited to $500 for individuals and $1,000 for heads of households and couples who file joint tax returns.
Planet Fitness stock appeared to climb on the news that the bill made it out of committee, rising more than 4 percent to above $47 a share in early afternoon trading. The stock opened Thursday at $46.21.
For taxpayers with health savings accounts or flexible spending accounts — whose contributions are pre-tax — the bill’s passage would mean they could use that money toward those qualifying exercise expenses.
However, for people without a tax-advantaged account, there’s no guarantee they could take advantage of the break at tax time.
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For starters, to count your medical expenses against your income, you must itemize your deductions. Even then, the total of your eligible health care costs must exceed a certain amount of your adjusted gross income to be deductible. For 2018, that threshold is 7.5 percent. In 2019, it goes to 10 percent.
If your expenses do exceed the floor, only the amount above it is deductible.
The legislation, which has bipartisan support, was voted on as part of a package of bills that addressed various aspects of the health care system. It’s unclear at this point whether the measure will eventually become law.