The official tax season has passed, but the year is really just getting started. 2016 brings us so many activities to look forward to like the summer Olympics and the much-talked-about presidential election. Although the available candidates are dwindling down, the race for the White House is still heating up.
Candidates are hitting the campaign trail to vie for the chance to be the next POTUS. So since the presidential election in full swing, this also means so are the campaign budgets for the remaining candidates. If you belong to a political party, you may receive information on making a contribution to a campaign. The choice is definitely up to you and is not an obligation to cast your vote. However, there are many people who may choose to make a presidential campaign donation because they believe that it will go towards a tax deduction for themselves, but is this true?
Are Your Political Campaign Contributions Tax Deductible?
If you decide to make a donation, can you get a tax deduction? That is the question on many Americans minds this election year. Many believe this rumor to be true but, contrary to popular belief the answer is no.
According to the Internal Service Review (IRS), The IRS Publication 529 states:
“You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible.”
This answer might take a lot of people by surprise. That is why it is very important that you do your research first before you write a huge check to your favorite presidential candidate for a tax deduction.
If you are still interested in supporting a candidate in the presidential race regardless of not getting a tax deduction, there is actually a few things you need to know. One is that there is still a limit as to how much you can donate.
What are the Campaign Contributions Limits?
The Federal Election Commission says an individual can only donate:
up to $2,700 per candidate per election, up to $10,000 to state, district and local parties combined each year, or up to $100,200 to a national political party, per account, per year.
If you want to contribute, but aren’t up to make a huge donation, you also have the option to set aside $3 of your taxes as a part of the Political Action Committees. This can be done on your 1040 federal income tax return.
Tax Consulting Help from Plano Tax Prep
Figuring out tax contributions and other deductions can be a full-time job. So, why not let the professionals help?
At Plano Tax Prep, we understand that addressing tax issues and developing strategies is a yearlong process. That is why we work with our clients to identify deductions that will help them make better and more informed choices. Our goal is to help you minimize your tax liability and maximize your compliance value.