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?
There is a limit of $500 for individuals and $1,000 for couples filing joint tax returns and heads of households. Tax breaks for qualified healthcare expenses is one of the few deductions that exist in the new tax laws since 2018. However, it must pass a full House for consideration and an identical Bill has to pass through the Senate and the House before it can be passed into law. Even if it passes through the House successfully, it may not pass easily before the Senate. The Bill’s passage for taxpayers with flexible spending accounts or health savings account would be the money contributed can support qualifying exercise charges and they would access these tax-advantaged accounts when making such payments. However, for those tax-payers who do not have tax-advantaged accounts, no guarantee exists that they would actually be able to take advantage of the 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.
More inFinancial Adviser
These Ridiculous Lawsuits against Celebrities Made Us Laugh Out Loud!
Lawsuits and celebrities go hand in hand. Usually a celebrity sues for defamation or is sued for breach of contract. Anyone...October 30, 2019
Let These Ancient Romans and Greeks Give You Sound and Ageless Financial Advice
Personal finance principles stand the test of time. Always earn more than what you spend. Learn to accept rainy days and...October 29, 2019
Mayweather Spent Millions on THIS Extravagant Purchase and It’s Making Our Head Spin!
Floyd Mayweather now resides in a 22,000-square-foot, five-bedroom and seven-bath, custom-built mansion in Las Vegas, Nevada. From very humble beginnings and living...October 28, 2019
These Frugal Stars Still Live on a Budget and We Should, Too!
Celebrities and business tycoons lead lavish lifestyles, travelling in private jets and yachts and we hear about stars facing bankruptcy after...October 25, 2019
Not a Morning Person? Maybe You Should Consider Eating Something Else for Breakfast
Love them or hate them, mornings cannot be avoided. If you wake up naturally by 6 a.m., you have to tell us...October 24, 2019
The Most Expensive Baby Photos Bought by Magazines
It’s true that babies are great blessing to a family. They tie families together and make each and every house feel...October 23, 2019
Buying this Minimalist ‘Dumb Phone’ May Cure Your Internet Addiction
It all started with the revolutionary idea; that people need to put down their smartphones. Tang and Hollier were on track way...October 22, 2019
Forget Networking, Social Media is Being Used to Sell Real Estate Now
About 66% of the market for first-time homebuyers comprises of millennials, while 99% of those searching for homes to purchase, use the internet...October 21, 2019
These Bigwigs Took a Loan and Turned it into a Million-dollar Business
Millionaires certainly enjoy the good life and can afford fancy mansions and cars but most didn’t start out rich. Like many...October 18, 2019