Why Aren't Political Donations Tax-Deductible?
Giving donations to a political cause isn't necessarily tax-deductible. The reason is that many political causes aren't tax-exempt organizations. However, you can find some ways to avoid paying taxes for a political cause if you look carefully at the procedures of how the organization supports a particular ideology.
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Political Organizations Not Exempt
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You have to find a tax-exempt political organization if you don't want to pay taxes on donating to it. These are known in Internal Revenue Service code as 501(c)(3) charities. Ones that aren't tax-exempt are political parties, campaigns or action committees. Others that are not tax-exempt are labor unions, schools and hospitals that work for profit and even individual people you support in a political cause.
Definition of a Tax-Exempt Organization
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A 501(c)(3) organization cannot legally campaign for candidates running for political office. It also cannot campaign against them either. If a 501(c)(3) organization gives contributions of any sort to a political candidate or party, the organization will automatically lose its status as a tax-exempt charity. Even any speeches or editorials made by the organization against a particular political ideology will threaten that tax-exempt status.
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Exceptions
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It's possible to find certain organizations that can still use a sense of politics without it threatening their tax-exempt designation. However, it has to be done in an unbiased way. This includes holding rallies educating people on a certain subject that's important to the organization. Publishing fliers that describes the organization's important cause can also be done, though should be written carefully to avoid one-sidedness. The Dough Roller says that voter drives can also be done without the IRS questioning the action.
Complexities of Lobbying
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Lobbying for local legislation on an important cause is another way for a tax-exempt organization to be political in a roundabout manner. But it can get complicated in how the lobbying is done without tax penalties. The IRS won't allow you to deduct taxes if the organization you give money to uses the money you give to do direct lobbying of local legislation. It is tax-deductible if the organization uses its own money to lobby as part of necessary expenses. These expenses can't exceed $2,000 in a tax year. A lobbyist for the organization can also deduct these expenses if he's lobbying on behalf of another person.
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