"The 33"-Road Bike Racing - Bike schwag = tax deduction?

It could happen... H.R. 2105 (currently in committee) would allow individuals to deduct up to $1,000, married couples filing jointly up to $2,000, from their tax liability for "sports and fitness expenses" (defined as amounts paid for fitness center memberships, physical exercise programs, and exercise equipment).

I've written my representative.



Dear Representative ****:

I am writing to encourage you to support H.R. 2105. If passed, this bill will be a substantial step forward in encouraging Americans to adopt a healthier lifestyle. I view H.R. 2105 as providing some much-needed economic incentives to personal health and fitness.

In the long run, a healthier population will reduce medical care costs and individuals' dependence on government programs. Exercise is also a family-oriented activity, bringing parents and children closer together.

I sincerely hope you will join five of your fellow republicans, and eight democrat colleagues, in sponsoring this bill. Thank you for your time.

Regards,
Brian Cheung
******, **


http://www.washingtonwatch.com/bills/show/111_HR_2105.html

I wrote mine too. It's nice when legislation not only benefits me personally, but is a good idea. Providing incentives to people to be more physically active is a cost-effective way to reduce the burden on health care from "lifestyle" diseases.

I will also right my rep, sounds like a win-win situation.

Should we start a thread in anticipation what we are all going to but when it is finally passed?

`(D) LIMITATIONS RELATED TO SPORTS AND FITNESS EQUIPMENT- Amounts paid for equipment described in subparagraph (A)(iii) shall be treated as a qualified sports and fitness expense only--

`(i) if such equipment is utilized exclusively for participation in fitness, exercise, sport, or other physical activity programs,

`(ii) if such equipment is not apparel or footwear, and

`(iii) in the case of any item of sports equipment (other than exercise equipment), with respect to so much of the amount paid for such item as does not exceed $250.


Just keep it under $250 per item :)

Just keep it under $250 per item :)

unless it is "exercise equipment"...i think a bike constitutes "exercise equipment"

no footwear? I could've gone for a set of Specialized shoes with custom inserts...

+1

I'm not sure a bike qualifies as "exercise equipment" like a treadmill would

I'm not sure a bike qualifies as "exercise equipment" like a treadmill would

If I put it on a trainer and call it a stationary bike (sure a titanium stationary bike), I'm deducting it.

Let's hope this doesn't pass into the beleaguered results of the commuter tax bit. An act of God for $20/month. Sheesh.

I'm not sure this is actually going to do most folks much good. The bill amends Section 213 d of the tax code to include qualified sports and fitness expenses in the definition of deductible medical expenses.

However, you can only deduct medical expenses that exceed 7.5% of your adjusted gross income.

It may be that by making qualified sports and fitness expenses meet the definition of medical expenses, you can use a flexible spending account to pay for them, which would appear to be the only way this would benefit 99% of people.

It may be that by making qualified sports and fitness expenses meet the definition of medical expenses, you can use a flexible spending account to pay for them, which would appear to be the only way this would benefit 99% of people.

(c) Exception for Health Savings Accounts- Subparagraph (A) of section 223(d)(2) of such Code is amended by inserting `, determined without regard to paragraph (1)(E) thereof' after `section 213(d)'.

I read that as them amending the HSA restrictions to allow for the purchase of "sports and exercise" equipment.

223 (d)(2)(A) would now read:
(A) In general
The term "qualified medical expenses" means, with respect to an account beneficiary, amounts paid by such beneficiary for medical care (as defined in section 213(d), determined without regard to paragraph (1)(E)* thereof for such individual, the spouse of such individual, and any dependent (as defined in section 152) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise.

*(1)(E): for qualified sports and fitness expenses.

Just keep it under $250 per item :)

No problem:
- top tube $249.99
- down tube $249.99
- seat tube $249.99
- outer chain ring $249.99
- left crank arm $249.99
- etc., you get the picture :)

^^I read that as just the opposite. The bill amends the defintion of medical care expenditures for the purpose of itemized deductions to include amounts paid for qualified sports and fitness expenses in 213(d)(1)(E).

It then excludes that added definition from the term qualified medical expenses as used in 223, the Health Savings Account section.

In other words qualified sports and fitness expenses are in the definition of medical expenses for 213 (deductions, but not for 223, HSA's.

However, that still doesn't address the question of whether you can use a flexible spending account for these expenses, which is different from a Health Savings Account.

I didn't realize that HSA is different and distinct from FSA. I also agree with your reading. In the end though I guess it's all moot!

It does appear the intent of the bill is to allow you to use Flexible spending accounts for these expenses:

http://www.prweb.com/releases/2009/05/prweb2396104.htm

But again FSA's are different from HSA's.

Health Savings Accounts require you to have a high deductible policy, then you can contribute up to $5900 to an HSA, which can be used to pay qualified medical expenses, or can be allowed to grow in the HSA tax free to be used for future medical expenses. If you're maxing out your 401K you can essentially use this to supplement you retirement savings on a tax prefenced basis.

HSA's do not have to be provided through your employer.(but you have to have the high deductible policy to qualify)

FSA's are provided through your employer and allow the payment of medical expenditures on a pre tax basis. You can't accumulate money in an FSA. You have to elect how much you want to put in the FSA each year, and then you have to spend it each year on qualified expenses or lose it.

No problem:
- top tube $249.99
- down tube $249.99
- seat tube $249.99
- outer chain ring $249.99
- left crank arm $249.99
- etc., you get the picture :)

:roflmao2:

But my HSA wants to buy me a new bike!

hah, I've already tried talking them into allowing reimbursement for a fitting. (no dice there)

^ how about a podiatrist's prescription for some new Rocket 7's?

I guess we all have to make sure we spend 7.5% of our income on bike stuff every year. I'll hop aboard that train.

^ how about a podiatrist's prescription for some new Rocket 7's?

Depends on the plan I suppose. My wifes custom running orthotics were Ok'd by our insurance coverage. I imagine that could possible be stretched to custom shoe coverage.

Depends on the plan I suppose. My wifes custom running orthotics were Ok'd by our insurance coverage. I imagine that could possible be stretched to custom shoe coverage.

That was my point with a fitting, I got orthotics to deal with foot and leg length problems and that was over $1000 and fully covered. But to get fitted with wedges... everyone freaks out that it's not an allowable expense. Oh well something else to save up for. :rolleyes:

Oh and just so this is clear, I'm not trying to get this covered by my insurance, I'm trying to talk my HSA plan administrator into allowing reimbursement. (It's already my money, I just have to spend it on allowable medical expenses)

That was my point with a fitting, I got orthotics to deal with foot and leg length problems and that was over $1000 and fully covered. But to get fitted with wedges... everyone freaks out that it's not an allowable expense. Oh well something else to save up for. :rolleyes:

Oh and just so this is clear, I'm not trying to get this covered by my insurance, I'm trying to talk my HSA plan administrator into allowing reimbursement. (It's already my money, I just have to spend it on allowable medical expenses)

Find someone to write the prescription for wedges. Wife's for orthotics came from our chiropractor (she's got some truly astounding running mechanics) I imagine a prescription would shut up the administrator.
Just a thought.