Non Deductible Expenses – Political Contributions and Others

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. 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.  There is no ambiguity in the IRS wording.  Although I have to note the irony that you can deduct donations to many organizations whose goal is to do good.  As many have heard me say the tax code is designed for two purposes:  raising revenue for the country and influencing social policy – charitable contributions.  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. 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.”

-Health Spa Expense. 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 co-worker from the next cubicle is not a deductible expense.

-Commuting Expenses. Similarly, the cost of traveling away from home on business is likely deductible. The car ride to and from the regular office every day, though, is not – no matter how long you spend 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.