Are Contributions to Political Campaigns Tax Deductible?
Taxpayers who itemize can deduct a broad array of expenses from their income tax returns, including interest on their mortgages and student loans and contributions to charitable organizations. However, the long list of allowable tax deductions does not include political contributions. You can donate to any political candidate you wish, but you should not expect the government to subsidize it by giving you a tax deduction.
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Types of Contributions
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The Internal Revenue Service does not allow taxpayers to deduct from their income taxes contributions made to a political candidate. In addition, IRS Publication 529 lists other types of political contributions and expenses that are not deductible. These include contributions to political parties, political campaign organizations, political action committees and political newsletter funds. Businesses cannot deduct, for example, advertisements placed in a political party's newsletter or other publication.
Political Fundraisers
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Many political candidates hold dinners and other fundraising activities in which supporters donate to the campaign by purchasing tickets to the event. The IRS views ticket purchases for these types of events as political contributions and does not allow taxpayers to deduct the expense. The Motley Fool website reports that you cannot deduct the price of admission to a campaign event even if the candidate donates part of the proceeds to charity.
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Inaugural Events
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Attending the inaugural ball or banquet for a newly elected president or governor is an exciting event for the candidate's supporters and campaign contributors. Admission prices or tickets to inaugural events are not tax deductible because the IRS considers them political contributions.
Lobbying Expenses
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Many individuals and companies engage in lobbying, trying to influence elected officials' votes on pieces of legislation in which the person or company is interested. IRS Publication 529 states that lobbying expenses, defined as expenses to influence legislation, participate in any campaign for public office, or influence public opinion about elections or legislative matters, are not allowable tax deductions.
Solution
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Although the IRS does not allow you to deduct political contributions from your taxes, it does allow you to direct a portion of your taxes to political expenses. All income tax return forms ask if you would like to donate $3 of your taxes to the Presidential Election Campaign Fund. This fund, administered by the Federal Elections Commission, provides campaign funds to presidential candidates and political parties. Checking the "yes" box on your return authorizes donating $3 of your taxes to this fund. Checking "yes" neither increases your tax liability nor reduces any refund to which you may be entitled.
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