When election season rolls around, it can seem like news and advertisements about political campaigns, candidates, and the elections themselves are everywhere. If you're planning to donate money, time, or effort to a political campaign, you might be thinking to yourself, "Are political contributions tax-deductible?"
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No. The IRS is very clear that money contributed to a politician or political party can't be deducted from your taxes.
The following list offers some examples of what the IRS says is not tax-deductible. If you have made contributions, donations, or payments for any of these, that amount can't be deducted from your taxes:
- A political candidate
- A political party
- A campaign committee
- A newsletter fund
- Advertisements in convention bulletins
- Admission to dinners or programs that benefit a political party or political candidate
- Political Action Committees (PACs)
Are political contributions tax-deductible for my business?
No. Your business can't deduct political contributions, donations, or payments on your tax return.
But I thought donations were tax-deductible?
While charitable donations are generally tax-deductible, any donations made to political organizations or political candidates are not. If you’re unsure whether the organization you’re thinking of donating to qualifies or not, the IRS provides a Tax-Exempt Organization Search Tool that you can use.
In most years, to deduct charitable donations on your personal return, you must itemize your deductions. Except that for 2020 you can deduct up to $300 per tax return of qualified cash contributions if you take the standard deduction. For 2021, this amount is up to $600 per tax return for those filing married filing jointly and $300 for other filing statuses.
- Typically, you'll list any charitable donation deductions on Form 1040, Schedule A.
- You can also leverage tools like ItsDeductible that track any deductions you make throughout the year and then import them into your return when you’re ready to file online.
Common examples of charitable donation deductions include money or property given to:
- Churches, temples, synagogues, mosques, or other qualified religious organizations
- Federal, state, or local governments, if your contribution is solely for a public purpose and does not seek to influence legislation
- Qualified nonprofit schools and hospitals
- Qualified nonprofit organizations, such as the American Red Cross, United Way, Girl Scouts of America, Boy Scouts of America, etc.
Common examples of what can't be included in charitable donation deductions include money or property given to:
- Groups whose purpose is to lobby for law changes
- Political groups or candidates for public office
- Civic leagues, social and sports clubs, chambers of commerce, and labor unions
- Groups that are run for personal profit
- Country clubs, lodges, fraternal orders, homeowners' associations, or similar groups
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What if I volunteer for a political campaign? Can I deduct my expenses?
No. If you are donating time or effort to a political campaign, political candidate, political action committee (PAC), or any group that seeks to influence legislation, then anything associated with that work is not a tax-deductible expense.
In contrast, if you have out-of-pocket expenses related to volunteering for a qualified nonprofit charitable organization, those expenses are tax-deductible.
- An important note here is that you can't deduct the value of the time you've spent volunteering for a charitable organization.
- You also can't deduct the value of any services you may have provided to a charitable organization. In other words, you can't deduct an "hourly rate" for your volunteering, but you can typically deduct unreimbursed mileage or other travel expenses incurred while volunteering for a qualified charitable organization.
What about electing to give $3 to the Presidential Election Campaign?
You may have noticed or even checked the box on your Form 1040 that asks if you want to give $3 to the Presidential Election Campaign Fund. If you check this box, the money that goes to presidential candidates who elect to use those funds will not actually come out of your pocket. That $3 also doesn't come out of your refund. If you want to support this process by checking the box, that's your decision, but it does not affect your taxes or deductions.
What is an in-kind contribution? Is an in-kind political contribution tax-deductible?
An "in-kind contribution" refers to any contribution other than a monetary donation, such as giving:
- Tangible goods,
- services, and
- your time.
Regardless of whether a political contribution is made in the form of money or an in-kind donation, it is not tax-deductible. However, in-kind donations of goods to qualified charities can be deductible in the same way as cash donations.
While political contributions aren't tax-deductible, many citizens still donate money, time, and effort to political campaigns and to support political candidates. If you are one of those citizens, and you were hoping for a tax break, unfortunately, you won't find one here.
If you're looking to save more on your taxes this year, find out if you're eligible for any of these 10 most overlooked tax deductions.
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