What Does your Gym Membership Have to Do with Your Tax Break? A Lot!
Just a few months after several individual tax deductions were eliminated, a bill advanced by a Committee at the Congress to cut off fitness costs was passed by a vote of 28 to 7. The Bill is called PHIT Act or Personal Health Investment Today Act, that was introduced by Representative Jason Smith, who suggested a similar bill in 2017. The bill with bipartisan support was voted to address sectors of the healthcare system.
Among the provisions of the Bill was that gym membership and expenses like safety equipment required for exercise routines would also come under the medical expenses would be considered as medical expenses for the purpose of taxation. The bill specifically excludes some expenses such as horseback riding, golf, hunting, sailing and even books or videos for activities associated with exercise.
Why Tax Breaks?
Shifting Approaches to Healthcare
To calculate medical costs against your income, list out your deductions. The sum of your eligible health care expenses must exceed a specific amount of adjusted gross income for possible deductions. In 2018, the threshold was 7.5% while for 2019, it is 10%. If your expenses exceed the threshold, only the amount in excess would be deductible. The bill signifies a shift in the American approach to healthcare focusing on a healthier lifestyle. It is estimated to reduce Federal revenue by about $3.5 billion over the coming decade. The American Heart Association, the Sports and Fitness Association and Fitbit Inc., have lobbied hard in support of the bill.
Some critics opine that the Bill is a sop to individuals of means, as current limitations for medical expenses deduction, reduce the chances of the deduction having any value for a lot of taxpayers. The limits to deduction on medical-related expenses were restricted since a long time and it is unlikely that many taxpayers would enjoy the benefit of the medical expense deduction. But expansion of medical expenses definition may increase the number of taxpayers enjoying the deduction. Those who were in supporting the Bill when initiated in 2017 including PHIT America, a corporation which advocates pro-physical common sense legislation. Primary sponsors of PHIT America are Rebook, Adidas, Under Armour and Brooks, Reebok and Planet Fitness. Sources claim that stock prices of Planet Fitness rose after the bill passed the Committee stage.
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