Tax and Financial News September 2018
Would a $1,000 Tax Deduction get you in the Gym?
America is one of the heaviest societies in the entire world. Two-thirds of Americans are classified as obese or overweight using Body Mass Index as a measurement. These aren’t just ugly statistics; medical conditions linked to obesity caused more than 100,000 deaths in 2017.
On top of all of this, obesity-related medical issues are a very expensive problem, costing society more than $190 million annually in preventable costs.
What’s the Solution?
At this point you’re probably thinking, OK, so what do we do about it? Basically, at a societal level, the core of the issue is what can the government do to motivate or incentivize diet and exercise, if anything? (Please, indulge me here and leave aside the argument over whether or not the government should even get involved in something like this.) Perhaps making gym memberships or fitness equipment tax deductible would help?
Some in Washington are thinking about this as we speak. Congressman Jason Smith (R-MO) is attempting to tackle the issue with the the PHIT Act, giving a deduction for taxes capped at $1,000 for qualified fitness-related expenses.
Current Versus Proposed Tax Law on Fitness Expenses
The current tax law allows a deduction under IRS code Section 213 for amounts paid for qualified medical care expenses that are not covered by insurance. While weight reduction programs can be deductible if directed by a doctor, gym memberships and fitness equipment are generally not deductible.
The PHIT Act aims to expand what constitutes medical care to include certain fitness-related costs such as gym memberships, exercise instruction (group or personal trainers), participation in physical activities (sports leagues) and safety equipment for such programs.
Certain sports such as sailing, golfing, horseback riding and hunting do not qualify, and neither do the purchase of exercise books or instructional videos. Under the bill, the tax deduction for memberships and instruction are capped at $1,000/$500 for married/single taxpayers. Fitness related safety equipment is capped at $250.
Limits on Deductibility
As great as this sounds, there are a few potential issues with the execution of the bill, which could prevent it from helping as many people as possible. The first is the medical expense floor.
Under tax law, deductions are limited to the amount of qualified medical expenses that exceed 7.5 percent of AGI. This means that anyone with an AGI of $85,000 would have to have $6,375 in medical expenses before they start to see any incremental benefit. Add to this the increased standard deduction (to $24,000/$12,000 for married/single taxpayers) under the Trump tax plan, and almost no one would qualify for the PHIT Act deduction since only an estimated seven percent of taxpayers will continue to itemize under the new law. This also disproportionately impact lower income taxpayers, who are more prone to obesity.
The PHIT Act also provides a second way to capture the deduction through the use of a Health Savings Account. Instead of a deduction, taxpayers could pay for the qualified fitness costs with pre-tax dollars up to $1,000.
The third and last way to benefit from the PHIT Act as written would be to reimburse yourself through a Health Flexible Spending Arrangement or Health Reimbursement Arrangement. The problem here is that you will need your employer to offer one of these plans before you can take advantage of them.
Watch and Wait
OK, so you’re thinking that you will get the deduction though one of the ways above – but don’t run out and join the gym just yet. Back in 2015, a similar bill was proposed that sought to allow a $2,000 deduction for fitness-related costs. Ultimately, the bill died; and there’s a good chance this will happen again since the PHIT Act would tack on $3.5 billion to the deficit over the course of 10 years.
As always, consult your tax professional for the latest news in legislation that might affect your bank account.
General Business News September 2018
Help Reduce Call Reluctance Among Sales Professionals
When it comes to selling, there are a lot of challenges in the industry. According to a 2016 report by Accenture and CSO Insights, 55 percent of sales professionals believe that their organization’s sales tools make them less productive; and 59 percent of those surveyed said they have too many tools at their disposal.
Accenture and CSO Insights also found in 2014 that middle-of-the-road performance reduces business revenue by 3.2 percent, which could be improved by a multiprong approach of more effective tools, more targeted training and more efficient data and analytics. It also determined that the top 20 percent of sales performers created three-fifths of a business’ sales, compared to the remaining 80 percent of the organization’s sales professionals producing the rest. Hence, the need to address gaps in performance exists, including sales call reluctance.
Defining Call Reluctance and Causes for Sales Professionals
Simply put, call reluctance by sales professionals is when an agent has a much harder time than normal picking up the phone to pursue the next sale. This is oftentimes due to a fear of being rejected. While this is more common among new sales professionals, it also can happen to the most seasoned salespeople.
Strategies to Reduce Sales Call Reluctance
Depending on the person, there are many ways to tackle this problem. One way to work through the fear is to acknowledge it by not overthinking and just jumping right in and dialing the next person on the list.
If making numerous calls within a week, 50 to 100 for example, seems too overwhelming and causes sales call reluctance, breaking up the number of outbound calls or the length of continuous cold calling with related tasks could help. The break might include answering existing client emails or improving product knowledge for upcoming sales calls, helping to break down calls into more attainable tasks.
Another reason why sales professionals – especially new hires – might experience sales call reluctance is because they don’t have much experience. Developing a script for them might be helpful because it gives them confidence when they’re on the call.
When it comes to creating and using a script, remember that it serves as a general guideline and not a verbatim talking guide for salespeople. For financial professionals for example, regardless of their experience level, it can remind them to explain each financial acronym to a cold-call prospect. By saying return on investment instead of ROI or required minimum distribution instead of RMD, sales professionals can help each prospect understand what those acronyms mean. By not assuming a potential customer understands industry jargon, it will make it easier for each prospect to understand the product or service. This can potentially raise interest in its benefits.
Sales professionals can also use scripts to customize their call, depending whether it’s a cold call or they’re following up on a referral, a sales email or a piece of direct mail marketing. For individuals who receive direct mail, sales professionals will already know who is targeted and this can give them time to make themselves aware of the current promotion before the call. This gives the salesperson more confidence, because when they do reach the person on the other line, they’ll be able to answer questions from the potential customer.
Tip of the Month September 2018
8 Ways to Stay Healthy When You Sit All Day
According to Dr. James Levine, an endocrinologist at the Mayo Clinic, sitting is the new smoking. In his study that spanned 15 years, it was determined that spending more than six hours a day on your behind contributes to unhealthy blood pressure, obesity, depression and some types of cancer. And that’s just for starters. Here are a few simple things you can do every day to combat these potentially life-threatening conditions.
1. Set a timer. When you’re engrossed in your work, time can slip away. You glance at your watch and you’ve been sitting for two hours. This can take a toll on your health. Set a timer for every 30 minutes. Get up, stretch, go the restroom, drink water, take a lap around the office while your files are downloading or step outside and get some fresh air. The more you move around during the day, the better your overall health – both physical and emotional – will be.
2. Wash your hands. Those pesky germs are everywhere: door knobs, keyboards, conference rooms, you name it. They’re invisible and potentially harmful. And, as much as you may (or may not) like them, your coworkers are also a source of infection, with their sneezing and coughing. Keep some hand sanitizer at your desk. Even better, get up and wash your hands in the restroom, the latter of which is doubly healthy because you’ll be moving your body.
3. Walk and talk. You’ve seen those movies where the boss says, “Walk with me.” It turns out this dynamic has some merit – and health advantages. Instead of sitting down with someone, ask them to take a walk with you to discuss the subject at hand. If it’s a phone meeting, get up and pace. Moving those legs is a good thing.
4. Drink plenty of water. Hydration is key to keeping yourself in tip-top shape. But know this: thirst doesn’t always signal that you need liquids; it can also be a sign of hunger, at which point you might be tempted to grab a sugary snack. Solution? Drink water instead to quell your grumbling stomach. Thirst is also a symptom of lack of sleep, which leads us to the next tip.
5. Get a good night’s sleep. When you don’t have enough sleep, everything has the potential to be off-kilter: your mood, attention span and your sense of being satiated. In case you feel hungry, drink water – or even hot tea. When your stomach is full, you minimize the chance of overeating or eating something that’s full of fat or sugar, which can lead to weakening your immune system in its already compromised state (sleep deprivation).
6. Invest in a pedometer. Getting steps in is not just for people over 65. Everyone needs them. Pedometers are generally affordable – between $15 and $35. According to an article in Prevention magazine, after one woman increased her daily activity to 9,950 steps a day, she lost five pounds and lowered her cholesterol 24 points. Get steppin’ for feeling better and staying well!
7. Check your posture. If refrains of “sit up straight” from parents and teachers are circling through your head, don’t push them away. Turns out that bad posture can lead to all kinds of detrimental effects: sore muscles, spinal curvature, blood vessel and nerve constriction, not to mention depression, low energy and stress. No one needs that. Instead, adjust your backside so that it touches the back of your chair. Look at the ceiling to stretch your neck. Raise your arms and reach for the sky. Relax your shoulders. And lastly, breathe.
8. Adjust your monitor. Sitting too close to your monitor can cause eye exhaustion, burning and muscle aches. And when your monitor is too high or low, it can lead to headaches, double vision, difficulty focusing your vision, nausea and dizziness. Here’s the remedy: sit about an arm’s length away and align the top of your screen with your eyes so that you look down a bit at your monitor. This should alleviate any irritations that might arise.
So, the next time you’re sitting at your desk and are in between tasks, give these tips a read. See if one of them applies and give it a try. One small tweak to your daily routine could make all the difference for your health and well-being.