Membership in gyms is a common outlay of money for most people trying to get healthy and in shape. But for tax deduction purposes, the IRS has rules about what kind of medical or business expense is allowed. In this article, the position of the IRS about deducting the cost of membership in gyms will be discussed and how the exceptions and regulations for making these expenditures qualify as tax deductions on your return.
General rule: Gym memberships are not deductible
General memberships at the gym are treated by the IRS as personal expenditures and are not deductible on your tax return. As stated in IRS Publication 535, the expenses have to be “ordinary” and “necessary” to be treated as business expenses that are deductible. Gym memberships, however, generally do not fall under this category because they are considered personal, though they happen to improve work performance or general well-being.
Exceptions for business purpose
There are very limited exceptions by which gym membership may be deemed a deductible business expense. For instance, in case you happen to be an actor, a bodybuilder, or a fitness instructor, where physical fitness is a requirement to conduct your business, you qualify to deduct gym fees under necessary business expense. Documentation of the expenses and linkage thereof to your professional activities are required.
Needs for business allowances
To qualify for a business deduction, you must establish that the gym membership is ordinary and necessary to your business. This involves evidence that physical fitness is a vital component of your professional duties and that the gym membership is used primarily for business. Supporting documentation, such as client contracts or promotional materials, are crucial to support these deductions.
Medical expenses: Another exception
Gym membership fees are also deductible under specific medical conditions. If a physician recommends a certain exercise program at a gym as part of the treatment regimen for a diagnosed medical condition, such as high blood pressure or obesity, the program fees related to it can be claimed as a medical expense. The gym membership fee is not deductible, but the specific program fees related to the medical condition are deductible.
Requirements for medical deductions
In order to qualify for deducting the cost of gym as medical deductions, you must have a written medical plan and condition by a health professional including the gym program as being essential. Also, your medical out-of-pocket costs should exceed 7.5% of your gross income to enable you to claim any deduction.
On-site gyms and business facilities
If a business provides its employees with an in-house gym, the cost of operating such facilities can qualify as a business expense. The gym must be for employees (not including owners and highly paid people) basically, but more than 50% of usage must be by them.
In short, although gym memberships as a rule cannot be deducted on your tax return, there are exceptions for medical and business reasons. For business deductions, the membership must be necessary and usual for your occupation. For medical deductions, there must be a documented medical problem and treatment regimen. Familiarity with these rules and good documentation are keys to successfully claiming these expenses on your tax return.
Additional considerations
- Documentation: Maintaining complete records of gym usage, such as receipts and use purpose, is required for business and medical deductions.
- Tax professional counsel: Obtaining the advice of a tax professional will assist in remaining in compliance with IRS guidelines and taking full advantage of allowable deductions.
- Alternative wellness plans: Companies can consider providing wellness programs that are more tax-favored than standard gym memberships.
Read more: How much money you’d have if you invested $1,000 in Ethereum 5 years ago?
Read more: What’s the best way to make a hotel reservation and avoid the pitfalls
