Tax-Free Training

 

By opening a Flexible Savings Plan (FSA) or Health Savings Plan (HSP), you might be able to deduct your training and nutritional services from your gross income. Here are the steps below:

 

1. Determine your account. Do you want a Health Savings Plan (HSP) or a Flexible Spending Account (FSA)? You, personally set up an HAS; whereas, your employer sets up the FSA on your behalf and contributes. For an HSA you must be enrolled in a high deductible health plan (see #2).  At the end of the year the HSA will roll over for future medical cost.

 

Both accounts are considered pre-tax so the account is essential a medical- IRA.

 

Pros of an HSP: higher limit for yearly contribution ($3300 v. $2500); un-used money rolls over into the next year.

 

Pro of a FSA: Your company makes the contributions; however at the end of the year the company will reabsorb any money left over. Your company, not you sets up the account, thus saving your time and research.

 

2.Qualify. Qualifying for a HSP requires a high deductible health insurance plan. High deductible is defined as $1500/year for singles and $2500/year for families. Your company has to participate in an FSA.

 

If you do qualify for a HSP, you’ll have to set one up with a bank. Some banks may require a montlhly deposit into the account. Research your options before opening your account to make sure it’s worth your while.

 

3. Contribute. Individual contributions for an HAS 3,330/year; family limit is $6550. If you are over 55, you can contribute an additional $1000/year. A FSA is limited to $2500 per year.

 

4. Consult.  It's best if your doctor verifies the reason you require personal training. Obesity is a qualified medical service. Here is a list of the IRS qualifying medical and dental expenses for 2013.

 

5. Fill out a 1099. To write off your personal training taxes, fill out a 1099 form with your trainers social security information. If you train at a gym, hang on to your receipts and expense them when you file. 

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