If our hospital reimburses dues to a physician, is that reportable on a 1099?

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If by “reimbursement” you mean reimbursing expenses the doctor has incurred in the course of providing services to the hospital, then you have a choice. If the reimbursement is done under the IRS rules of an accountable plan, i.e., the doctor is conducting “hospital business” and accounts for the expenses to you by providing receipts, and—if there was a cash advance involved—returns any unused cash within a reasonable timeframe, then you do not have to report the expense reimbursement on the 1099.

That said, you may report it along with compensation payments for the doctor’s services if you wish; then it is up to the doctor to claim the expenses on his tax return.

However, it depends on the nature of the organization the physician is a member of. If it’s for a country club, yes, the dues would be reportable as income; but if it’s for a medical association, then no, the dues are not reportable as income.

Publication 535 states on page 44 that club dues and memberships are not tax deductible if they are organized for business, pleasure, or other social purposes. However, there is an exception for professional organizations (including medical associations), boards of trade, business leagues, chambers of commerce, civic or public service organizations, real estate boards and trade associations. Membership in these organizations is tax deductible. If membership in one of these kinds of organizations is required for the doctor to perform the duties for your hospital, then you can deduct the cost as a business expense and not include it on the doctor’s income.

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