Should any member of AFP have to personally pay for their membership dues, luncheon fees, or any other
professional development fees associated with the AFP Lowcountry Chapter ,the following is an outline of what is considered
to be tax deductible by the IRS. Please read carefully and consult your tax professional with any questions.
The
Association of Fundraising Professionals (AFP) is an organization classified as a 501(c)(6) organization
(business leagues, chambers of commerce and boards of trade) by the Internal Revenue Service. The Lowcountry Chapter of AFP is classified as
a 501(c)(3) organization (organizations organized and operated for religious, charitable, scientific or educational purposes)
under AFP’s group exemption.
AFP’s membership
dues are $250 annually for active and associate members. An introductory membership is $100 for the first year of membership.
In addition to the AFP national dues, the Lowcountry chapter dues are $25 annually. The Lowcountry chapter holds monthly meetings,
the cost of which is $22 a person per meeting for members and $32 a person per meeting for non-members. Each monthly meeting
offers some type of educational or professional development activity, including speakers on topics relevant to the fundraising
profession. The cost of the monthly meetings includes the cost of lunch. In addition to monthly meetings, members of
your chapter are offered the opportunity to participate in programs such as National Philanthropy Day, which honors local
businesses and individuals for their philanthropic contributions, and the Summer Institute, which offers educational and professional
development programs, as well as networking opportunities. In addition to local programs, there are national and international
programs such as AFP’s Annual International Conference, which members can attend at a discounted rate.
Tax
Deductions:
1.
Annual Dues
Generally, the Internal Revenue Code allows a taxpayer to deduct “all ordinary and necessary
expenses paid or incurred during the taxable year in carrying on any trade or business.” The Regulations specifically
address dues to an organization such as AFP. They state that “ [d]ues and other payments to an organization, such
as a labor union or a trade association, which otherwise meet the requirements of the regulations under section 162, are deductible
in full.” Therefore, if being a member is reasonably related to the member’s trade or business, the payment
of dues to AFP, including the local chapter, should be deductible. The amount of any deduction for the payment of dues will depend on each individual member’s
circumstances. Dues that are paid for a member by their employer, or which are reimbursed by an employer, will not be
deductible. Additionally, if a deduction is allowed, the amount of the deduction may be subject to the “2 percent floor”
for miscellaneous itemized deductions. This limitation allows certain deductions to be taken only if they, in the aggregate,
exceed 2% of the taxpayer’s adjusted gross income. Each member will need to consult his or her individual tax
professional to determine whether this deduction would be subject to this limitation, and, if so, to determine their adjusted
gross income.
2.
Meetings of the Lowcountry Chapter of AFP
If a member’s payment of dues qualifies for deduction, the member may also be able to deduct
the fee charged to attend meetings of the Lowcountry chapter of AFP, including monthly meetings and other special events.
However, as the cost of meetings is due, in part, to the meal provided, it is not clear under the Internal Revenue Code whether
the cost associated with the meal may be deducted. Generally, the cost of meals may not be deducted unless incurred
while away from home on business. However, as the purpose of attending the meeting is to further the member’s
trade or business by taking part in the educational programs offered at the meetings, some accountants take the position that
the cost of the meeting is deductible as an expense related to the furtherance of the taxpayer’s trade or business or
as professional development or continuing education, notwithstanding the fact that a meal is provided. Each member and
their tax professional should determine if the fee to attend the monthly meeting should be fully or partially deductible.
As with the deduction for the annual dues, any amounts paid in connection with the meetings may be subject to the “2
percent floor” for miscellaneous itemized deductions. Again, each member will need to consult his or her individual
tax professional to determine whether this deduction would be subject to this limitation, and, if so, to determine their adjusted
gross income.
3. Other Expenses
Other
costs incurred by members to attend events of AFP or the Lowcountry Chapter may be deductible as well. Examples of additional
costs that may be deductible are:
· The cost to attend meetings and events held by the Lowcountry chapter
of AFP, such as the monthly meetings and events such as Summer Institute and National Philanthropy Day. Transportation
costs, including the standard mileage rate (which is established at least yearly by the IRS) for those members who commute
to the meetings, as well as parking, may be deductible. Any deduction for costs associated with meals at these events, if
deductible, may be limited to 50%.
·
The cost to attend conventions held
by AFP, such as the AFP Annual International Conference. The cost of travel and transportation (such as plane or bus
tickets, taxis, car rentals, gas, hotel rooms, etc.) should be deductible as long as there is a sufficient relationship between
the member’s trade or business and his or her attendance at the convention or meeting, so that his or her trade or business
is benefitted by his or her attendance. As the convention provides numerous continuing education opportunities, this
requirement should be met, provided that the members avail themselves of the educational opportunities available. Costs
related to meals and entertainment incurred while attending an AFP convention should also be deductible, but the deduction
would likely be limited to 50% of the cost. Any expenses incurred for personal (i.e. non-business) purposes while attending
a convention are not deductible.
As
with all deductions, AFP members should make certain they maintain adequate documentation of any expenses they plan to deduct,
including cancelled checks, receipts, etc, as well as a detailed log of any mileage driven which is deductible as a business
expense. Each member should consult his or her tax professional to determine what documentation is necessary for each
deduction.
