This topic contains 2 replies, has 3 voices, and was last updated by  kellywardcpa 2 weeks, 2 days ago.

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  • #5714
     dbswain91 
    Participant

    Hi, I work for a relatively large nonprofit. We’re in the process of creating a membership program. I’m wondering how we should determine the amount our members are able to deduct from their taxes from their membership dues. The general rule seems to be “members can deduct only the amount of their contribution that is more than the market value of the benefits they receive”. So a quick example being, if they pay $100 to be a member and as a benefit, they receive a ticket to one of our events which cost $40 at market, they can deduct $60 from their taxes.

    But it gets a little complicated since some of the benefits our members will be receiving don’t have a market price. So for example, we’re going to give members posters that are only for members…so it’s impossible to say how much they’d cost in the market.

    Any ideas here?
    Thanks you SO much for the help!
    -Dan

  • #5716
     Steve Vick 
    Keymaster

    Hey Dan,
    This is a good question. And one I honestly never even thought about. Let me pose this to an account friend and see what she says.

    Oh, and sorry for the late response. The auto post notifier didn’t work for me. hmmm..

    I’ll get back to you soon. THanks.

    Steve
    Nonprofit Ally Founder/Admin

  • #5748
     kellywardcpa 
    Participant

    Hi Dan,

    For the most part, you would have to come up with some way to put a value of goods/services received. That being said, there are a few exceptions that may work in your situation! I’ve provided the information from the IRS publication 526 below:

    Membership fees or dues. You may be able to deduct membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that is more than the value of the benefits you receive.
    You can’t deduct dues, fees, or assessments paid to country clubs and other social organizations. They aren’t qualified organizations.
    Certain membership benefits can be disregarded. Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less.
    1. Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as:
    1. Free or discounted admission to the organization’s facilities or events,
    2. Free or discounted parking,
    3. Preferred access to goods or services, and
    4. Discounts on the purchase of goods and services.
    2. Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) isn’t more than $10.60.

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