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I am a self-employed contractor. My wife and I have a paid position with our church doing campus ministry at our local university. Our position is really all about contacting people and spending time with them. Thus, we expense pretty much everything that would fall under the category of contacting people (which is mostly food expenses).

Recently, my wife and I got a gym membership at the university (we qualify because we are alumni). We specifically got this membership because it enables us to go to the gym with the students we are contacting. If it were not for that, we would likely have foregone the membership entirely.

Because the membership is to help us at our position, is it a tax-deductible expense? I'd imagine being able to write off something like a membership to a golf club if it were necessary to schmooze clients and whatnot. Wouldn't this be similar to that, thus able to be written off?

  • I doubt that writing off the gym membership would pass the smell test. What business results from your schmoozing with students at the gym? – Dilip Sarwate Jan 8 '14 at 0:13
  • @DilipSarwate, by "smell test" are you referring to the objective standard of the law or the subjective standard of the auditor? i.e., is it a legitimate expense but might not pass the auditor? Or is it an illegitimate expense? By your implications through your emphasis of the word "business," I guess I couldn't fit any church-related practices in that implicit definition of "business," yet I know churches and self-employed ministers are able to write off many expenses. Indeed, more than most professions. – ryvantage Jan 8 '14 at 4:16
  • My goal is not to game the system. If the law establishes rightful expenses that do not need to be taxed, then I expect to take advantage of it. But I'm not trying to weasel my way around the tax code. @littleadv, this will only be our second tax season at this position, so we are still learning the ropes. No, I can't afford a "decent" tax professional. So your expert opinion will have to suffice. – ryvantage Jan 8 '14 at 4:19
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Assuming its in the US:

No, it is not, and such things are usually treated as "red flags" for audit (and no, golf club memberships are not deductible either). The food expenses are not deductible in their entirety as well, only up to 50% of the actual expense, and only if it is directly business related. From what you've described, it sounds like if you have an audit coming you'll be in trouble.

The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. You cannot deduct dues paid to:

Country clubs,

Golf and athletic clubs,

Airline clubs,

Hotel clubs, and

Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions.

  • nolo.com/legal-encyclopedia/tax-deductions-golfers.html implies it may be. A google of [country club memberships deductible] is in order. I suggest country club, not gym, as OP, in effect, is using the gym in that manner. And searches for gym deduction lead to requests to deduct as medical expense, not business. I'd suggest he keep contemporaneous notes tracking every visit with and without clients. – JTP - Apologise to Monica Jan 8 '14 at 13:02
  • @Joe IRS begs to differ. Are you willing to argue it with them? I doubt there's any real business need in this gym subscription. irs.gov/publications/p463/ch02.html#en_US_2012_publink100033898 – littleadv Jan 8 '14 at 17:07
  • I'm not. I appreciate your link to an IRS pub, and I suppose I shouldn't cite Nolo press in such matters. Until your citation, I (mis)understood that clubs' dues had the potential for write-off in some proportion to their business use. – JTP - Apologise to Monica Jan 8 '14 at 19:05
  • The IRS link says membership dues/fees as not being deductible. The nolo.com link agrees with this, but says that the fees for a specific session may be deductible, if there's a business purpose. – DanTilkin Jan 8 '14 at 19:06
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    @ryvantage you'd have to justify each such visit. While technically the IRS cannot blacklist it as the dues, I seriously doubt it would withstand an audit. – littleadv Jan 9 '14 at 3:11

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