Are HOA Fees Tax Deductible?

The task of figuring out which items qualify as tax deductions may be confusing at times.  Residents that have never lived in a homeowners association often have the most questions about what can be included on their taxes.  The best advice for homeowners is to visit the HOA website frequently for updates or contact a board member to know what is allowed when filing taxes.  Almost everyone knows that residing in a homeowners association means paying HOA fees but can they be claimed on your taxes?

 

 

A majority of the time, HOA fees are not deductible as the IRS considers them to be assessed by a separate entity.  However, not every association is the same so look into what the HOA fees cover.  These fees are collected to cover the maintenance on amenities in the community and a portion is saved for the reserve funds. 

If a portion of the fees are used for areas that you could pay for then you might be able to claim that portion on your taxes.

 

In one instance, a portion of the HOA fees are tax deductible.  Homeowners who have a home office are allowed to claim a percentage of the fees that is proportional to the space occupied by the home office.  For example, if the home office takes up 20% of your home, you may claim 20% of the HOA fees on your taxes.

 

 

In most cases, the HOA website caters to homeowners that live in the community but some homeowners associations allow homeowners to rent their place.  In which case, HOA fees are tax deductible for the owner of the property since that is considered part of the operating expenses.  Tax season is a time where residents want to include every allowable deduction.  If you do your own taxes, consult with a tax professional and follow their recommendation regarding HOA fees!