Well, it's tax season again, and as usual I am not among the earliest of the birds in preparing my tax return. But if any of you in the Houston Association of REALTORS® are on a similiar schedule when it comes to filing your return, the information I am sharing may help you to claim the correct deduction amount on your Federal income tax return for the HAR dues you have paid.
Why is any clarification needed? HAR annual dues contain assessments and contributions that go toward PACs (Political Action Committees) - and these dollars spent on political causes are not deductible. I had a time of it trying to figure out all of the numbers last year, but I discovered that HAR produces a handy breakdown of the allocation of dollars on their website, which I will excerpt and post here. Hope it helps!
If you are a member of a different Association, you may wish to contact them and ask about this matter.
-Begin Excerpt from HAR.com-
Your billing statement is for the combined annual dues in the Houston Association of REALTORS®, Texas Association of REALTORS® and the National Association of REALTORS®. A portion of this amount is for one-year subscriptions to the publications: $2 for Houston REALTOR® (for REALTOR® and Affiliate members), $5 for Texas REALTOR® (for REALTOR® and Affiliate members), and $6 for Today's REALTOR® (for REALTOR® members).THESE SUBSCRIPTIONS ARE NOT OPTIONAL.
*Your 2012 dues include a $35 mandatory assessment by the National Association of REALTORS®, of all REALTOR® members to fund a nationwide public awareness campaign that includes TV network ads highlighting the value a REALTOR® brings to a transaction and stressing the importance of using a REALTOR® and qualifies as deductible dues.
**Your 2012 dues also include a $5 Legal Fund assessment and a $5 mandatory IMPAC assessment by the Texas Association of REALTORS®, of all members to fund TAR's Issues Mobilization fund. The IMPAC assessment is not deductible for income tax purposes.
***Contributions are not deductible for Federal income tax purposes. Contributions to the Texas Association of REALTORS® Political Action Committee (TREPAC), the Texas Association of REALTORS® Federal Political Action Committee (TAR FedPAC), and the REALTOR® Political Action Committee (RPAC) are voluntary and are used for political purposes. The amount indicated is merely a guideline, and you may contribute more or less than the suggested amount. The Association will not favor or disadvantage anyone by reason of the amount of their contribution, and you may refuse to contribute without reprisal by the Association. TREPAC initially receives each contribution, and a percentage is transmitted to RPAC via TAR FedPAC to meet TREPAC's RPAC annual quota. RPAC supports Federal candidates with those contributions which are charged against your limits under 2 U.S.C. 441a. The percentage forwarded to National RPAC each month may be obtained by contacting the TAR FedPAC administrator at 800-873-9155.
The portion of your dues that is spent for lobbying the state or federal government is NOT DEDUCTIBLE FOR FEDERAL INCOME TAX PURPOSES. The non-deductible percentages of dues for lobbying are: 31% or $37 for NAR, 14% or $14 for TAR and 24% or $32 for HAR. Also, the $5 IMPAC assessment from TAR is not deductible.
- REALTOR® Members - $88 is NOT deductible for Federal Income Tax Purposes
- Secondary Members - $32 is NOT deductible for Federal Income Tax Purposes
- Affiliate Members - $46 is NOT deductible for Federal Income Tax Purposes
- Salespeople (billed to broker) - $83 is NOT deductible for Federal Income Tax Purposes
The remaining portion of your dues may be deductible as an ordinary and necessary business expense subject to restrictions imposed as a result of association lobbying activities.