What is the PHIT Act?
It’s about time you did.
Lawmakers recently reintroduced the PHIT Act—short for the Personal Health Investment Today Act—to the legislative floor. It originally went before Congress in 2018 but did not complete its journey into law before the session ended. Before that, however, the bill had actually passed the U.S. House of Representatives by a landslide 277-142.
The PHIT Act “allows a medical care tax deduction for up to $1,000 ($2,000 for a joint return or a head of household) of qualified sports and fitness expenses per year. The bill defines qualified sports and fitness expenses as amounts paid exclusively for participating in a physical activity, including (1) fitness facility memberships, (2) physical exercise or activity programs, or (3) equipment for a physical exercise or activity program,” per Congress.gov.
How Will the PHIT Act Benefit Me?
- Gym memberships
- Fitness classes, such as yoga or spin classes
- Personal training sessions
- Sports equipment, such as bicycles or running shoes
- Youth sports league fees
- Exercise equipment, such as treadmills or weightlifting machines
- Fitness-related apps or online subscriptions
An important thing to remember is that deductions you claim must be pre-tax dollars, such as funds saved in a flex spending account or an HSA. And, of course, save your receipts!
The PHIT Act’s ultimate goal is to improve your health. That’s why this bill introduces personal fitness as a government interest. Being more fit and taking better care of your body will decrease the potential of future health problems and limit your future healthcare costs.
What Happens Now?
Those in support of the bill are people who want to see their fitness and athletic expenses become more affordable (we’re assuming that’s you). You can take confidence in the fact that this bill already passed through one part of Congress with relative ease. It’s highly likely to foresee the bill going into law during this legislative session.
What Should I Do?
First, if you don’t already know of or have an HSA or FSA (flexible spending account), get familiar with one. These accounts will likely be the only way that you can take advantage of the deductions allowed by the bill. Many employers offer these kinds of accounts, but you can also talk with a financial advisor for other options to open one personally.
If you’re investing money yearly in your own personal fitness, keep in mind what products you’re purchasing. There may be a single-item maximum reimbursement in the ballpark of $250. You also won’t be able to use it for “general fitness apparel” like tennis shoes or basketball shorts.
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