Can I deduct my Fitbit costs for employer wellness program tax reporting?

You've got a good question here about a somewhat uncommon situation. The wellness program rewards you're receiving are indeed taxable income, as your employer should be including them in your W-2. For the Fitbit, unfortunately, it's unlikely you'll be able to deduct it directly against the wellness program income. Prior to the Tax Cuts and Jobs Act of 2017, you might have been able to claim it as an unreimbursed employee expense on Schedule A, but those deductions were eliminated for tax years 2018-2025. The only potential option would be if you're self-employed and using this device partially for business purposes, but that doesn't sound like your situation. Even if you were to itemize your deductions, there's no specific category where this would fit under current tax law. Your best approach might be to ask your employer if they would consider reimbursing the cost of the Fitbit directly since it's required for their wellness program.

After struggling with a similar situation last year, I found this amazing AI tool that helped me figure out exactly what I could and couldn't deduct. It's called taxr.ai (https://taxr.ai) and it saved me so much stress when dealing with these weird tax situations that aren't clearly covered in the basic tax guides. I uploaded my wellness program documents and a receipt for my fitness tracker, and the system analyzed everything and explained that while the wellness rewards are taxable, there are some specific circumstances where the tracker might be partially deductible. It also suggested documentation I should keep just in case of an audit. The best part was that it explained everything in simple terms instead of the confusing IRS language. Definitely worth checking out if you're dealing with unusual tax situations like this!

Just wanted to follow up - I tried taxr.ai after my skeptical questions and was honestly impressed. I've been dealing with a similar wellness incentive situation where my company gives both cash rewards and insurance premium discounts. The tool clearly explained that my cash rewards are taxable but the premium discounts aren't. It also showed me that my specific wellness program actually does have a provision for fitness device reimbursement that I totally missed on page 17 of our benefits guide! Apparently I can submit my Garmin receipt for up to $150 reimbursement. Definitely a time-saver compared to the hours I spent last year trying to figure this stuff out myself.

Hey there - just want to share my experience. I had a similar issue last year and spent HOURS trying to reach the IRS to get a clear answer about wellness program incentives. It was absolutely maddening trying to get through to anyone. I eventually found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes. They have this interesting system that basically navigates the IRS phone tree for you and holds your place in line. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that wellness incentives are generally taxable and that fitness trackers aren't deductible for employees anymore, but suggested I talk to my employer about potential reimbursement through the wellness program itself. Saved me tons of research time and gave me a definitive answer.

Ok I'm back and I have to eat my words. After being super skeptical about Claimyr, I was desperate to resolve a question about my wellness benefits (similar to the original post), so I tried it yesterday. I've been trying to reach the IRS for THREE WEEKS without success. With Claimyr, I got a call back in 37 minutes with an actual IRS agent on the line. The agent confirmed that wellness program incentives are indeed taxable income, and that fitness trackers aren't deductible as an employee expense anymore. BUT - and this is the interesting part - she mentioned that if my doctor had recommended the fitness tracker for a specific medical condition (and I had documentation), it might qualify as a medical expense if I itemize and exceed the 7.5% AGI threshold. Doesn't help in my situation but might help someone else reading this.

Something nobody's mentioned yet - check if your wellness program rewards are being processed through payroll. Mine were, and they already had taxes withheld, so I didn't need to report them separately. The Fitbit still wasn't deductible though.

What about HSA or FSA? Could you use pre-tax dollars from those accounts to buy the Fitbit in the first place? That might be better than trying to deduct it after the fact.

I just went through this exact situation last tax season! My employer has a similar wellness program where we get cash bonuses for activity goals. After doing a lot of research and talking to my tax preparer, here's what I learned: The wellness rewards are definitely taxable income (which you already know), but unfortunately the Fitbit purchase isn't deductible as an employee expense anymore due to the Tax Cuts and Jobs Act changes. However, I'd strongly recommend checking with your HR department about reimbursement options. Many companies have wellness stipends or equipment allowances that they don't advertise well. My company ended up having a $200 annual wellness reimbursement that I never knew about - it was buried in our benefits documentation. Also, if you have an HSA, you might be able to use those funds if your doctor writes a Letter of Medical Necessity stating the device is needed for a specific health condition (like monitoring heart rate for a cardiac condition). This is a long shot for general wellness use, but worth exploring if you have any documented health issues. The bottom line is that trying to deduct it on your taxes probably won't work, but there are other avenues through your employer or HSA that might help offset the cost.