2022 was a midterm election year in the United States, so you might have noticed more newsletters and advertisements asking you to donate your money or your time to a political cause.
When you’re considering making contributions or donations that benefit a political candidate, party or cause, it’s important to know that they are not tax deductible. That includes donations to:
- Political parties.
- Political committees.
- Individual political candidates.
- Political action committees (PAC).
Payments made to the following political causes are also not tax deductible:
- A newsletter fund
- Advertisements in a political convention program or politically affiliated publication
- Cost of admission to a political event, including dinners that benefit a candidate or party
What about volunteer time and out-of-pocket expenses?
Time spent and expenses incurred volunteering for a political campaign are also not deductible. This includes things like supplies and transportation to and from campaign events. IRS regulations make it clear that neither volunteer time nor out-of-pocket expenses donated to political candidates and parties can be deducted from gross income for income tax-filing purposes.
Are political contributions tax deductible for businesses?
Businesses cannot deduct contributions they make to political candidates and parties, or expenses related to political campaigns. And if you check the box that asks if you want to give $3 to the Presidential Election Campaign Fund when you’re filing your tax return, that isn’t deductible either.
Political contributions vs. charitable donations
All of this catches some people by surprise because contributions of cash and property are tax deductible if you meet certain criteria and itemize deductions on your tax return. Charitable donations are tax deductible under certain conditions, so why aren’t political contributions?
Tax-exempt charitable organizations — also known as 501(c)(3) organizations — are specifically prohibited from attempting to influence legislation or participating in political campaigns.
Political campaigns cannot be classified as charitable or 501(c)(3) organizations. And political donations cannot be treated the same way as tax deductible contributions.
If you’re unsure about whether a donation you have made is considered political or not, use the IRS Tax-Exempt Organization Search Tool to see if the organization you donated to is classified as a 501(c)(3) organization.1
Limits on political contributions
Note that even though political donations are not tax deductible, the IRS still limits how much money you can contribute for political purposes.
In 2022, an individual may donate up to $2,900 to a candidate committee in any one federal election, up to $5,000 to a PAC annually, up to $10,000 to a local or district party committee annually and up to $36,500 to a national party committee annually.2
What is a deductible charitable contribution?
Given that political donations aren’t tax deductible, it’s important to familiarize yourself with IRS rules regarding the deductibility of charitable contributions.
You can generally deduct cash, securities and property donated to qualified charitable or 501(c)(3) organizations on your federal income tax return. Be sure to keep good records supporting your charitable contributions.
For cash contributions, keep a canceled check, bank or credit card statement or a receipt or letter from the charity that shows the charity’s name and the date and amount of the contribution. For contributions of $250 or more, you have to get a written acknowledgement of your donation from the charity.
For non-cash contributions valued at less than $500, you must obtain a receipt from the charity that contains a description of the property.
For non-cash contributions valued at between $500 and $5,000, you must obtain an acknowledgement that includes how and when you obtained the property and the cost or other basis of the property.
And for non-cash contributions valued at more than $5,000, you must obtain a written appraisal of the property from a qualified appraiser.
Usually, you can only deduct charitable contributions if you itemize deductions by filing Schedule A along with Form 1040. If you claim the standard deduction, you can’t deduct charitable contributions. However, for tax year 2021 — the taxes you file in 2022 — you can deduct charitable contributions up to $300 without itemizing deductions.3
Regardless of how much time, money or effort you pour into a political candidate, party or cause, you won’t be able to score a tax deduction on your federal return.
You may still be able to lower your taxable income by claiming other deductions, including:
- Itemized deductions, such as mortgage interest, state and local taxes and medical expenses exceeding 7.5% of your adjusted gross income.
- Education deductions, such as student loan interest.
- Investment deductions, such as certain contributions to a traditional IRA.
- Business deductions, such as costs for a home office, work equipment or the self-employment tax.
Be sure to consult with a tax professional if you have more questions about the deductibility of political donations or charitable contributions.
You can organize and track your donations (and all of your financial accounts and transactions) using Empower’s free financial tools. With this technology, you can know exactly where you stand financially.