Employment related professional association dues or fees are allowable as tax deductions if they meet the guidelines established by the IRS (Internal Revenue Service). You must know how the dues will be utilized by the association to calculate what portion of the dues can be a tax deduction. Fees paid for professional associations or memberships are classified as miscellaneous deductions. This means that only the amount of those dues or fees paid which exceed 2 percent of your adjusted gross income can us listed as a tax deduction. Additionally, the dues or fees must meet the IRS classification of an ordinary and necessary expense to be a deduction.
<strong>Utilization of Professional Association Dues</strong>
Any portion of the membership dues that are used for the funding of social events, for recruitment of new members, for lobbying or for political contributions cannot be taken as a tax deduction. You can get an itemized listing from the association on how your dues were used. Total the amount of the funds that are used by the association to assist you in your professional career and subtract 2 percent of your adjusted gross income. If the balance is more than zero, you will list this amount on Schedule A of tax Form 1040. You do not have to submit your receipts with your taxes, but need to keep them in the event that you are audited.
<strong>Ordinary and Necessary Professional Association Dues</strong>
Professional associations are those organizations directly related to your ability to earn income. When being a member of a professional organization will assist or enhance your career or income capability, it may be partially or wholly deductible. These organizations include professional boards, trade boards, real estate associations, chambers of commerce, bar associations, and professional leagues. If your employer requires you to have membership in an association as a condition for employment and does not reimburse your costs, those dues or fees are tax deductions. If you are required to have any medical examinations or tests to qualify for membership and your employer does not reimburse you, those costs are also tax deductible.
If you have paid for membership in any professional or trade association and are not clear on whether all or some of the fees are tax deductible, you can always seek the advice of a tax professional. Everyone who earns an income must pay taxes and everyone is entitled to reduce the amount owed by all legally allowable deductions.