Tax Deduction for a Club Membership

Tax Deduction for a Club Membership
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Club memberships aren't just a leisure expense that allow you to spend time with friends and colleagues. Memberships can also help you gain clients and promote your business. The Internal Revenue Service specifically prohibits some club deductions, but if your club is not on the prohibited list and you can demonstrate that your membership is a business expense, you can deduct the costs of dues and other membership fees.

Business-Related Clubs

You can deduct a club membership if you can demonstrate that it is a business expense. For example, if you join a club to meet new clients, the membership could be an advertising expense. If your boss requires you to join a specific club to entertain clients, you can generally deduct the cost. You can't, however, deduct the cost of a club membership just because you occasionally do business there; the primary focus has to be your business. Common club deductions include a membership in the Chamber of Commerce and rotary clubs.

Prohibited Clubs

The IRS specifically prohibits deductions for certain types of clubs. You can't deduct membership dues and expenses for gym memberships, country clubs, golf clubs and airline and hotel clubs. You can, however, deduct the cost of some outings at these clubs if they are related to your business. For example, if you meet a client at his country club and pay for both of your meals, you can deduct this expense.

Professional Organizations

Professional organizations often function as clubs, with dues and other membership requirements. You can deduct the cost of membership in professional organizations, even if you're not required to join. For example, a lawyer who joins a criminal defense attorneys professional organization or who pays dues to the bar could deduct these costs. Conferences and other events put on by these sorts of organizations are generally deductible.

How to Deduct

You can list most deductions on Schedule A of your 1040. You don't have to send receipts or other proof to the IRS, but will have to show this proof if you are audited. If you're reimbursed by your employer for a business expense, you can't deduct it, but if you reimburse an employee for her expense, this becomes a deduction for you.