Did you make any political contributions this year?
While donations to individual candidates or parties may not seem like a major expense, they can add up quickly.
And while many people wonder if they can deduct those contributions on their individual tax returns, the answer is no.
According to the IRS, “Most personal political contributions are not tax deductible.”
Generally speaking, only contributions made to certain tax-exempt organizations, such as non profit organizations that engage in social welfare and advocacy work, may qualify for deduction. So, while donating to campaigns and causes you believe in is important, just be aware that those contributions may not provide any financial benefits come tax season.
Can Corporations Write Off Political Contributions?
A lot of people assume that political contributions are tax deductible like some other donations. Political contributions are not tax deductible, though; individuals cannot deduct contributions made to political campaigns on their federal tax returns, regardless of whether they itemize or claim the standard deduction.
Businesses likewise cannot claim a deduction for political contributions, whether they’re pass-through entities or file a corporate return.
Political contributions are defined as those made to political campaigns. This includes donations made to individual candidates and to support ballot initiatives or political issues that aren’t tied to individuals. None of these contributions is tax deductible for either individuals or businesses.
This guide is designed for people who have made political contributions and are wondering about their deductibility. It explains why political contributions are not tax deductible, and it looks at other types of contributions that may be. It also explains what businesses need to know about making political contributions and incurring expenses related to government affairs.
Why Political Contributions Are Not Tax Deductible
1. Political Campaigns Are Not Registered Charities
2. It’s Written Into the Tax Code
3. There Are No Deductible Political Expenses
Deducting Expenses Related to Lobbying and Government Affairs
1. Lobbying Expenses
2. Expenses Related to Influencing Legislation
3. Deductible Government Affairs Expenses
Pitfalls to Avoid When Dealing With Political Contributions
Confusing Federal and State Taxes
Political Contributions as Public Relations or Advertising Expenses
Assuming All Government-Related Expenses Are Nondeductible
can my employer see my political contributions?
It may come as a surprise, but your employer can indeed see your political contributions. Federal law prohibits employers from discriminating against employees on the basis of their political beliefs or activities. However, this does not prevent employers from accessing public records of political donations made by their employees. This information is often available through campaign finance disclosure laws, which require candidates and organizations to disclose their campaign contributions.
In addition, some states have laws that specifically require the disclosure of political contributions by government contractors and their employees. While it may seem like a breach of privacy, it is important to remember that any donation made with a personal credit card or check is considered a public record and can be accessed by anyone who conducts the appropriate research. To ensure confidentiality, consider contributing through methods such as anonymous cash donations or trustee-directed contributions. Ultimately, it is important to exercise your right to participate in the political process, but being aware of potential privacy concerns can help protect your personal and professional reputation.