In times of election campaigns, many people want to make donations to support their favorite party or candidate. Donations are an excellent practice; what better way to support desired changes than to help financially?
Even if the intentions when making donations in political fields are honest. With good ideas, asking if this donated money applies to tax deductions is not superfluous.
An accurate answer about donations
Money donated to political campaigns or any aspect related to these campaigns and politics generally is not applicable for tax deductions. Regardless of what type of political donation it is, the IRS does not take it into account for deductions.
Also, donations, not money, such as goods, services, effort, and time, are not tax-deductible. Even expenses incurred in contributing one of the above goods and services are not tax-deductible.
In other words, under any political context, if you decide to donate money or any of the other aforementioned intangible services and benefits, none of them are recognizable for a tax deduction.
No matter how much effort, time, or money you put into volunteering for a political campaign, it will not apply to any tax deduction.
To give a more succinct explanation: neither money nor tangible or intangible property, time, effort, services, or expenses incurred in carrying out any of these without being for politics is tax-deductible.
More specifically, any above donations are not deductible when going to a party, a newsletter fund, a campaign committee, a candidate, action committees, or even programs that benefit a party or candidate.
Are donations not tax-deductible?
The confusion about whether political donations are tax-deductible is due to the assumption that they are. It is assumed that most donations, or at least a large portion, are tax-deductible.
In other words, many donations have the added function of being tax-deductible. On the other hand, when these donations are directed to political organizations or candidates, they do not apply for deductions.
The donations qualified to influence the tax deductions are all those goods granted or money given by any means available to various entities and persons to receive them as charitable donations.
More specifically, the donations qualified for tax deduction must be made to churches, temples, or other organizations or structures destined for the determined practice of religion.
It is also applicable with donations made to the state or government, whether in the national, state, or local sense. This aspect should not be confused with donations made to politics.
Donations made to the government, the state, or various institutions are made to improve their functioning or structure and not to change certain legislation or lean towards a political party.
Likewise, tax-deductible donations can be made to schools, hospitals, and other organizations such as the Red Cross or the Scouts. It is enough that the mentioned entities are not related to a profit-making purpose.
What if you are not convinced that the organization you donate does not serve political purposes?
Although it is not very common, it is possible to donate money or goods to organizations without knowing they have political purposes. When you originally thought of taking advantage of the opportunity to deduct taxes, you will not be able to do so.
For this type of confusion, the IRS makes available to its users a tool specially designed to search for organizations or entities that are qualified to receive donations and can be deducted from taxes.
It is named by the IRS a “tax-exempt organization finder.” In it, you must select the preferred database to filter the search results.
The options available for the database are Publication 78 Data, Determination Letters, Automatic Revocation List, Form 990-N, and copies of returns. In addition, you will also have the option to not filter on “Search All.”
After you have chosen your preferred database, you must proceed to insert the employer identification number or the legal name of the organization.
Then, in the “Search term” section, you must enter the organization’s name or the employer’s identification number, as you have chosen.
Finally, you must enter the name of the city where the organization is located and then select the state’s name from the list available, along with the name of the country also shown in the list.
For years I have studied American finance regulations. All the information in this blog is sourced from official or contrasted sources from reliable sites.
Salesforce Certified SALES & SERVICE Cloud Consultant in February 2020, Salesforce Certified Administrator (ADM-201), and Master degree in “Business Analytics & Big Data Strategy” with more than 13 years of experience in IT consulting.