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Have you ever wondered if your business can deduct the cost of an on-site gym? 

In this episode, Mike focuses on the tax deductibility of gym memberships and on-premises athletic facilities for small businesses. He clarifies that personal gym memberships are not deductible, with rare exceptions for fitness instructors. However, gyms or athletic facilities located on business premises can be deductible if they primarily serve rank-and-file employees, not owners or highly compensated employees. He also provides detailed guidelines and examples to help business owners understand and comply with IRS rules for these deductions.

Discover the rules and exceptions by tuning in!

[00:00 - 05:10] Gym Membership Deductions and On-Premises Athletic Facilities

• Mike discusses the non-deductibility of personal gym memberships.
• It is a rare exception for fitness instructors using gyms as their business location.
• To qualify to be deductible, facilities must primarily serve rank-and-file employees.
• Highly compensated employees are employees who earn $155,000 or more in 2024.

[05:10 - 11:30] Examples and Case Studies

• Example 1: Gym usage by owners and highly compensated employees vs. rank-and-file employees.
• Example 2: Single owner and one rank-and-file employee using the gym.
• Example 3: Owner and family members using the gym exclusively.
• Mike shares the importance of using a sign-in sheet or key card system for tracking gym usage.

[11:30 - 15:45] Conclusion and Additional Resources

Direct Quote:

"No business allowable business deduction for personal expense, which would be a gym membership, but there are some rare circumstances on where a gym membership might be acceptable." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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