Club
Memberships
Club dues are taxable income to the employee, except for
that portion of the dues that are business related, which must be substantiated.
Clubs that fall into this category are airline and hotel clubs, as well as golf,
athletic, and country clubs. The portion of
the club dues that are personal income to the employee can be treated as a wage
expense to the employer for tax purposes.
Example. Brad Harvest is a member of an
airline club, which allows him access to club facilities at a variety of
airports around the country. He estimates that he uses these facilities 70
percent of the time while he is traveling on company business. He can
substantiate this estimate with travel records. The annual cost of the
membership is $400. Accordingly, only 30 percent of the cost, or $120, is
recognizable as his personal income.