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Are political contributions tax deductible?

Are political contributions tax deductible? - TaxAct Blog
As this year’s presidential election season hums along, campaign contribution totals have well exceeded 800 million dollars – and they continue to rise. With this level of fundraising, one question is sure to come to mind – are political contributions tax deductible?

The short answer? No.

Most political contributions, whether local, regional or national, are not tax deductible and haven’t been for years. So, if you happen to be one of the many people donating to political candidates’ campaign funds, don’t expect to deduct any of those contributions on your next tax return.

And the same goes for a business return. In most cases, political contributions are not considered a viable business expense and therefore are nondeductible.

While writing checks to a political party may not help your tax bill, there are ways to financially support a cause you believe in and still take a tax benefit in the process. You just have to find a charity that qualifies for tax-deductible contributions.

Tax qualified charities aren’t allowed to lobby or give money to a candidate, political party or political action committee (PAC). However, under the banner of “education,” they can help persuade people about pertinent issues, which could have an impact on the final election outcome.

How do I know if donations to a charity are tax deductible?

Only contributions to 501(c)(3) organizations are tax deductible. These nonprofits have been designated as charitable organizations by the IRS.

To help clarify any confusion, specific details regarding the type of IRS organization and whether donations are tax deductible, should be clearly stated by the charity.

If you’re still in doubt the IRS has an online tool that can help. The Exempt Organizations Select Check search tool lets you search for organizations and find certain information regarding their status.

Be aware that not all organizations are listed and some use “doing business as” names, meaning they operate their business under a name that’s different than their legal, registered name. In this case, searching by their legal name may not show up in the database.

What about other nonprofits that promote causes I believe in?

If you want to donate to most social welfare nonprofits, otherwise known as 501(c)(4) organizations in the tax world, you’ll have to do so without receiving a tax benefit.

However, there are a couple exceptions.

Donations to veterans’ organizations with 90 percent war vet membership and volunteer fire departments can be deducted on your tax return.

Do you think donations to political candidates should be tax deductible?

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About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.

Comments

  1. Michael Linck says:

    50% of political donations are tax deductible up to $50 in Virginia tax returns.

    • You are right! This post was specific to federal tax law since so many states vary. However, If you live in the state of Virginia, you’ll definitely want to know political donations can be deducted up to 50%. We’re going to amend the post to clarify. Thanks for mentioning it!

  2. George Larsh says:

    The other day I received a letter from the IRS, It said that they did not receive a W2 For tax year 2014. I went to my employer and got a copy to send to them. I have been doing my taxes with Tax Act I could that have happen?

    Thank you

  3. Notable exception to this is the state of Oregon. On the Oregon state income tax return, political contributions (to a qualifying organization with an issue on the ballot in that tax year) qualify for a tax CREDIT (that’s right – a credit, not a deduction) of up to $50 ($100/couple).

    Check the state law to make sure you qualify (and yes, TaxAct asks every year if we have contributed). I don’t know if any other state offers anything similar.

    • This is correct. Apologize for any confusion! Our posts are usually written from the federal level since the states vary in requirements so much. That’s why we didn’t mention any state details. However, we’ll amend the post to clarify that point and to hopefully avoid any other confusion. Thanks for reading and for your input!

  4. Ruthe Price says:

    political donations should not be tax deductible. That’s a loophole for the wealthy.

  5. Definitely not–If you want to support political organizations, you should do it on your own–not deductible.

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