How to Deduct Union Fees

Union fees are considered by the IRS to be un-reimbursed job expenses. They can be taken as itemized deductions on Schedule A of Form 1040. These deductions, however, can only be taken to the extent that they exceed 2 percent of your adjusted gross income (AGI). If you have enough medical expenses, taxes, mortgage interest, charitable contributions and casualty or theft losses to itemize deductions, you should take advantage of this tax benefit.

Difficulty: Easy

Instructions

Things You'll Need:

• Tax forms

Deduct Union Fees

1. Fill out IRS Form 1040 (U.S. Individual Tax Return) through line 37 (Adjusted Gross Income).

2. Gather receipts and canceled checks for all of the job expenses and miscellaneous deductions you would like to take a deduction for on your tax return. Besides union fees, this category includes professional books and magazines, work clothes and uniforms, employee home office expense, job agency fees and un-reimbursed employee travel, meals and entertainment.

3. Divide your receipts into three groups: un-reimbursed employee expenses, tax preparation fees and other expenses (safe deposit box, etc.) and total them.

4. Calculate 2 percent of your AGI (Form 1040, line 37). The dollar amount of your un-reimbursed employee expenses and other miscellaneous deductions must exceed 2 percent of that number or they are not deductible (and are only deductible to the extent that they do exceed that number).

5. Enter your un-reimbursed job expenses, including union fees, on Schedule A, line 20 and your other miscellaneous deductions on lines 21 and 22. Enter the total of lines 20 through 22 on line 23.

6. Subtract 2 percent of your AGI from line 23. Enter the difference on line 26. This is the deductible amount of your un-reimbursed job expenses and miscellaneous deductions.

7. Complete the remainder of Schedule A.

8. Add and enter the total of your itemized deductions on line 28 and on Form 1040, line 40.

Tips & Warnings

• The IRS allows you to deduct all dues and initiation fees you pay to join a union. You can also deduct contributions for benefit payments to unemployed union members. You cannot deduct the portion of the contributions that provide funds for the payment of sickness, accident or death benefits. Neither can you deduct contributions to a pension fund even if you are required by the union to contribute to the fund.
• If your adjusted gross income is more than $150,500 ($75,250 if you are married filing separately), you may have to reduce the amount of some of your itemized deductions, including union fees.