Do you want $1,000 tax deduction per year?

Do you want $1,000 tax deduction per year?

The US is the fattest country in the world, with two out of every three Americans considered overweight. It is a real as well as an expensive problem. They are likely to incur $1,500 each year in medical expenses. The American medical system is burdened with an extra $190 million in annual costs, which is an ultimately preventable condition. You might ask: How to prevent it? How to spur people towards gym?

A deduction of up to $1,000 per year is very possible. What if the cost of a gym membership and the related tools were tax deductible? That would definitely give you a boost and help bring about real changes in your physical fitness regimen.

One Congressman is betting on it. Jason Smith, (R-Mo) introduced HR 6312 — the Personal Health Investment Today, or “PHIT” Act ” — which seeks to encourage healthy lifestyles by providing a tax deduction of up to $1,000 to individuals who want to get in shape.

Under the current law, Section 213 of the Internal Revenue Code provides a deduction for any amount paid for “medical care” that is not otherwise compensated by insurance. Medical care includes amounts paid for health insurance premiums, qualified long-term care services, diagnosis, cure, mitigation, treatment, and transportation.

The IRS has held that the cost of a weight loss program may be deductible, but only if the taxpayer is diagnosed with obesity or some other ailment for which a doctor directs the taxpayer to lose weight. HR 6312, however, would change that for tax years beginning after December 31, 2018. The bill would add to the definition of medical care “qualified sports and fitness expenses,” which include amounts paid for:

  • Membership at a fitness facility,
  • Participation in a program of physical activity, and
  • Safety equipment used in a program of physical activity.

A “fitness facility” is required to meet certain standards in order for the membership fees to be tax deductible: it may not offer golf, hunting, sailing or riding facilities, or be a private club owned and operated by its members.

The bill would cap the total deduction at $1,000 (if married filing jointly, $500 if single). The cap on safety equipment would be $250 per taxpayer. There are only three ways taxpayers could enjoy a $1,000 tax deduction per year if HR 6312 should ever become a law:

  • Be one of the 7% of taxpayers who will itemize under the new tax law
  • Maintain an HSA (or a similar vehicle, a Medical Savings Account), or

•    Health Reimbursement Arrangement (HRA).[/vc_column_text][/vc_column][/vc_row]

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