As someone who runs a gym, it’s essential to understand that some prospective gym members may wonder if their membership is tax deductible. The good news is that, in some cases, you can deduct your gym membership fees from your taxes. In addition, you can also deduct other gym-related expenses, such as personal training sessions and fitness classes, from your taxes.
This article will explain the details of whether or not a gym membership is tax deductible and what steps you need to take to ensure it is. It will also cover topics such as the Internal Revenue Service (IRS) requirements for gym tax deductions, which expenses are eligible for deduction, and what is needed to claim gym deductions.
Can You Deduct Gym Memberships as a Business Expense?
Gym membership costs are non-tax-deductible as they are considered personal expenses, not business expenses. However, like all rules, there are a few exceptions.
Suppose you are a freelancer, small business owner, or self-employed person who works in an industry that requires physical fitness. In that case, there is the potential to deduct gym expenses as they qualify under “ordinary and necessary” costs incurred for your work. If a compelling case can be made regarding this deduction’s applicability to your job requirements and duties, it could prove advantageous on your tax return.
So, is a gym membership tax deductible? In some cases, yes! Generally speaking, the IRS allows you to deduct gym memberships as long as they are part of a “continuing expense.” This means that you can deduct gym memberships for as long as you are exercising regularly, and it is considered part of a workout program to maintain your fitness levels for work.
However, this deduction is limited and can only be used if the gym is necessary for your job or is related to a specific medical condition that is required for your job. You must also remember that you can only deduct gym memberships and other expenses related to your job up to 2% of your adjusted gross income.
Ordinary Vs. Necessary Expenses: What’s the Difference?
If you’re trying to find out if you can deduct gym expenses, it is essential to understand the difference between ordinary and necessary expenses. Unfortunately, many are unaware of the distinction between “ordinary” and “necessary” business expenses. To clarify, let’s take a look at what these terms mean:
Ordinary Expenses
In a nutshell, an ordinary expense is commonplace within your line of work. For instance, if you are a vocal coach, then buying sheet music would be considered regular and usual in the industry. Since it’s common for someone who teaches music to need such materials, this constitutes an obvious cost because it isn’t something found on everyday business agendas but thematically makes sense—hence why it comes under ordinary expenses!
In the context of gym memberships, this is considered an ordinary expense if you must stay fit and maintain your physical condition to perform your job duties. For example, gym membership is an ordinary expense if you’re a professional athlete because you must stay fit and perform your job duties.
Necessary Expenses
Necessary expenses, in this case, imply those that are indispensable to running your business. Again, going back to the example of vocal coaches, not only do they often invest in sheet music sheets, but it is also a must-have item for them. They must have ample musical pieces to suit the full range of their student’s needs and wants.
The only way for your gym membership to qualify as a tax-deductible business expense is if it meets the above mentioned requirements: it is ordinary and necessary. If you can demonstrate that your gym membership is essential for you to perform your job duties, it can be considered an ordinary and necessary business expense.
Are Gym memberships Deductible as a Medical Expense?
No, gym memberships are not deductible as a medical expense. While it is true that physical activity is beneficial for overall health, membership in a gym is not considered to be a medical expense, at least according to the IRS.
However, if you are using the gym to treat a specific medical condition – such as certain heart diseases or diabetes – then it is possible to deduct the gym membership fees as a medical expense. However, the requirements are pretty tedious as the gym must be prescribed by a doctor and is used to treat the condition.
Documentation, such as a doctor’s note, is required to prove to the IRS that it is indeed being used for medical purposes. Additionally, you must keep track of all fees and expenses related to the gym membership and must be able to provide receipts, invoices, or other proof that the IRS requires.
How ReliaBills Can Help as a Billing Software
Knowing this information is crucial as a gym owner as it can affect your revenue. But despite everything said, the goal remains the same: get paid and get paid on time. So if you’re looking for billing software that can help you collect payments from your customers, ReliaBills is the perfect solution.
ReliaBills is a cloud-based billing and invoicing platform designed to help businesses of all sizes streamline their billing and payment processes. With ReliaBills, you can easily create invoices, track payments, manage customers, and get paid faster.
You can even create a recurring billing system to automatically charge your customers on a set day of each month. This is especially useful for gym owners who want to ensure they get paid on time each month.
ReliaBills is integrated with the most popular accounting systems, such as QuickBooks, making it even easier for businesses to track expenses and manage their finances. ReliaBills can also apply tax on your customer invoice, so you don’t have to worry about tax deductions regarding gym memberships.
And, if you want even more features, you can upgrade your account to ReliaBills PLUS (our premium version). For just $24.95 per month, you can enjoy additional features such as auto collection notifications, SMS text messaging, chargeback recovery, automated failed payment recovery, Auto Bill, virtual payment terminal, and more.
With ReliaBills, you have a complete package to help you manage your gym business and ensure you’re getting paid on time each month. Take the hassle out of billing and invoicing with ReliaBills – the best billing software for gym owners.
Wrapping Up
Whether you’re a gym owner or a regular gym goer, It pays to know what is and is not tax deductible for gym memberships. The good news is that a gym membership is tax deductible sometimes—as long as it falls under the right circumstances. The right billing software is also necessary for gym owners to get paid on time and hassle-free. So, go ahead and check out ReliaBills.
