There are many hot phrases coming out of this presidential
campaign cycle, but it is not all crooked locker room talk. Taxes have also
been getting lots of attention, and not just when it comes to which candidate’s
plan you prefer. For if you go to Google and type in “are political” the first
suggestion is “are political contributions tax deductible?”
And sometimes the best part of my job is when it is really
easy.
The answer is simply “no.” And the IRS’
wording on the subject doesn’t leave any room for debate:
You can't 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
aren't deductible.
For anyone wondering then, there is your answer. Although I
have to note the irony that you can deduct donations to many organizations whose
goal is to do good. That may say something about the quality of work that our
political system does.
Really, it is just more that the IRS does not see political
action as a deductible expense. After all, you generally also cannot deduct
expenses incurred for trying to influence legislation, participating in
political campaigns or communicating with executive branch officials to
influence their actions.
Looking at these political maneuverings got me to thinking
that it might be worth looking at other things that are not tax-deductible. So
to that end, you should not be counting on the positive tax ramifications of
the following:
-Wristwatches.
For in the IRS’ wisdom-filled words, “You can’t deduct the cost of a
wristwatch, even if there is a job requirement that you know the correct time
to properly perform your duties.” Although this does make me wonder if pocket
watches then would be allowable.
-Health Spa Expense.
And if your job also requires that you be in good physical condition to perform
your duties, you still do not get to deduct any spa expenses.
-Travel Expense for
Other Individuals. There are plenty of legitimate reasons for deducting
expenses when traveling for business. There are many fewer legitimate reasons
for why you had to pay for your wife and family to accompany you.
-Lunches with
Co-Workers. In a similar vein, if you have traveled away from home for
business, those meals can be deductible. When it just hits noon at the office,
however, hitting a restaurant with the girl from the next cubicle is not a
deductible expense.
-Commuting Expenses.
Similarly, the cost of traveling away from home on business is likely
deductible. That car ride to and from the regular office every day, though, is
not – no matter how long you spent in traffic.
There are obviously many more that I could get into here.
There are also some categories of deduction where I could just pick one and
write an entire article pulling apart the nuances of what is and what is not
deductible. What this highlights is the usefulness (or dare I say, need) of
having someone who understands the rules on your side. So if you are curious
about what expenses you have incurred this year are actually deductible, this
is a good time to start getting answers to those questions and making some moves
before the end of the year if your tax situation needs help.
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