Are Gym Memberships Tax-Deductible?

The end of a year is when many people reflect on ways they’d like to improve their life, and one of the most popular resolutions is to improve one’s health. People will usually pair striving to eat better with working out more often. Naturally, signing up for a new gym membership can be a great place to start with working out more.

The end of a year also has people thinking about how to maximize their tax deductions, so you may be asking yourself the question: Can I deduct my gym membership?

Maybe.

The investment we make into maintaining good health, or trying to stay in good shape, is generally considered a personal expense. The most likely answer for most people would be no, as the general rule of thumb is that you aren’t able to deduct the cost of your gym membership. Though there are some exceptions, personal, living, or family expenses are generally not tax-deductible; the IRS generally views them as nondeductible personal expenses.

However.

If you were diagnosed as being obese, or having hypertension, for example, your gym membership may be deductible as a medical expense. In the event your gym membership can be claimed as a medical expense, the expenses are reported as itemized deductions. As a medical expense, the deduction will be subject to certain adjusted gross income limitations that can vary depending on the tax year in question.

Now it will also take a little more than just simply being told by your doctor that you are obese and need to lose weight to prove that the gym membership qualifies as a medical expense. It will require written verification of the specific diagnosis of the medical condition, specific physical or mental defect, or illness. Additionally, as part of their diagnosis, your doctor must recommend in writing the use of the gym or fitness facility as a treatment for your specfic ailment. Documentation will be required to prove the cost of your gym membership and what specific activities at the gym are used in the treatment of your condition. If you already had a gym membership prior to receiving the diagnosis, it may be more difficult to prove that it meets the requirement to be deducted as a medical expense.

Now if you’re a business owner you need to know that employers who offer to subsidize their employees' gym membership expenses can deduct those costs as ordinary and necessary business expenses in the year in which they paid them. However, business owners may have to pay employment taxes on the gym membership payments as fringe or supplemental wage payments.

If you're interested in finding other ways to maximize your tax deductions, check out Sandy Botkin's book Lower Your Taxes - BIG TIME!