Many Americans show their support for their preferred political candidate by voting for or donating to the candidate’s political party. If you’re wondering if your financial contribution to a political campaign affects your taxes in any way, you’re not alone. Here’s everything you need to know about tax deductible contributions for political campaigns.
Are Political Contributions Tax Deductible for Businesses?
In short, yes. However, businesses are cautioned against deducting political contributions, donations, or payments on their tax returns.
Can I Deduct My Expenses If I Volunteer for a Political Campaign?
For those who volunteer for a political candidate, campaign, or political action committee, the time you volunteer will not be considered a tax deductible donation when filing your taxes.
Is it Considered a Tax Deduction When Supporting a Presidential Campaign?
When filing your taxes, you have the option to set aside $3 of your taxes to go towards the Presidential Election Campaign Fund when you complete your 1040 federal income tax return form. You can check the box to donate the funds and it will not affect your taxes or deductions.
Are There Limits to Political Contributions?
Taxpayers wanting to support a political candidate or party can contribute the following amounts:
Up to $2,800 per candidate and election.
Up to $10,000 to state, district, and local parties combined each year.
Up to $106,500 to a national political party, per account, and per year.
Are there any Political Donations that are Tax Deductible?
To qualify, you must be a registered non-profit organization that operates as a true charity to take a tax deduction for the donation.
If you volunteer, give cash or non-cash items to a 501(c)(3) organization, your donation may be a qualified tax-deductible charitable contribution. To confirm if the organization you gave a donation to is a 501(c)(3) organization, you can use the Tax-Exempt Organization Search Tool from the IRS.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
The ongoing pandemic has caused many Americans to suffer financially due to a loss of jobs and businesses shutting down. Proposals for another coronavirus relief package are currently ongoing and should include another stimulus check distributed out to taxpayers as well as providing assistance to businesses that are finding it difficult to stay open.
Many taxpayers have switched from working in the office to working at home because of COVID. Most people don’t realize that there could be tax implications when working from home and could end up with a tax-time surprise if they’re not up to date on current tax laws.
Economic Impact Payment Extended for Non-Filers to November 21st
Taxpayers who don’t typically file their taxes and have yet to receive a stimulus check should register online on the IRS website in order to receive their economic impact payment. The IRS is allowing Americans to register online until November 21, 2020.
Taxpayers in Financial Hardship could Qualify for Stimulus Check
Many Americans are facing homelessness or financial hardship during the ongoing pandemic could qualify for a $1,200 Economic Impact payment. If your income threshold is below $12,200 or $24,000 if you’re married, you will need to register with the IRS by November 21st in order to receive your money.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
For taxpayers who have been working with the IRS, it is important for them to know that they have a right to finality. Specifically those who have had their tax return(s) audited by the IRS should know that there is a Taxpayer Bill of Rights in place to protect them.
For taxpayers currently in the audit process, here is what you need to know about your right to finality:
Taxpayers have the right to know
The maximum amount of time they have to challenge the IRS’s position.
The maximum amount of time the IRS has to audit a tax year or collect a tax debt.
When the IRS has finished an audit.
The IRS typically has three years from the date that a taxpayer files their return to review for an additional tax for the year in question.
There are very few exceptions when it comes to the three-year rule. An exception would be considered if a taxpayer fails to file a return or files a fraudulent return. In either case, the IRS would have an unlimited amount of time to assess tax for the tax years in question.
The IRS generally has 10 years from the date of assessment to collect unpaid taxes. It is important for a taxpayer to know that the 10-year period cannot be extended unless a taxpayer enters into a payment plan or the IRS obtains court judgments.
A 10-year collection period may be suspended when the IRS cannot collect money because a taxpayer has an ongoing bankruptcy or there’s a collection due process proceeding involving the taxpayer.
A taxpayer will only be subject to one audit per tax year. The IRS has the ability to reopen an audit for a previous tax year if the IRS deems it necessary.
If you need tax help, contact us for a free consultation.
If you’re out of work due to the coronavirus and in need of money fast, you might want to consider withdrawing from your retirement savings. Taxpayers who have had a negative impact on their finances due to the pandemic should know that temporary changes to the rules under the CARES Act allows taxpayers to make early withdrawals from their traditional individual accounts. Here is everything you need to know about making an early distribution and what the possible tax implication could be for you.
Is My Social Security Number Required in Order to File My Taxes?
For those that are filing for the first time on their own, it can seem overwhelming trying to figure out what information you need to provide to the IRS in order for your return to be accepted. One question that many people ask is if a social security number is necessary to have when filing their taxes. Here’s everything you know about if your social security number is required and what you should do if you don’t have one.
The IRS to Contact Taxpayers Who are Eligible for a Stimulus Check
Due to the ongoing coronavirus pandemic, many Americans have been struggling to stay financially afloat. To help offset the many expenses that households across America are facing, the government issued out $1,200 stimulus checks to qualifying taxpayers. If you have yet to claim your check or didn’t realize that you were eligible for relief money, you can expect the IRS to contact you to notify you about your check.
If a Second Stimulus Check is Approved, When will it Arrive?
Ongoing negotiations are underway to pass another relief package to assist Americans that were affected by COVID-19. It is assumed that another economic relief rescue package will be passed and taxpayers will be paid out for a second time this year however, it will depend on how quickly the IRS can distribute the money to qualifying Americans. Here are important stimulus check facts taxpayers should know.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
Going green has tax benefits that could potentially reduce your total tax bill when filing your taxes. More taxpayers are taking advantage of these tax incentives by buying alternative vehicles, using Energy Star products or installing energy equipment in their home. Here are the top green tax credits you should be claiming.
Clean energy vehicle savings
Although tax credits for most hybrid vehicles have expired, there are still ways that taxpayers can take advantage of having an alternative vehicle.
There are certain vehicles that could qualify under the Alternative Motor Vehicle Tax Credit. The amount of the credits vary based on the make, model and year of the vehicle that a taxpayer is attempting to claim. Additional requirements to be aware of before claiming the tax credit are:
The car was purchased before 2017.
You are the original owner of the vehicle.
You drive your car primarily in the U.S.
For those who purchased a plug-in electric vehicle, you could be eligible for the Qualified Plug-In Electric Drive Motor Vehicle Credit. The credit applies to new electric vehicles bought after December 31, 2009. In order to qualify for the credit you will need the following:
The vehicle must have been purchased new.
The vehicle must have been made by an eligible manufacturer under the Clean Air Act.
Have at least four wheels.
Have the ability to be driven on highways and public streets.
Have a weight rating of less than 14,000 pounds.
Purchased an electric motor that uses a rechargeable battery to generate at least 5 kilowatt hours of capacity.
Tax credits for both of these can range from $2,500 to $7,500 based on the vehicle’s battery capacity and the overall size of the vehicle.
Make a donation for a smaller tax bill
Taxpayers who make charitable contributions such as cellphones, game consoles, computers or any other qualifying electronic donation, can write it off based on the fair market value. In order to be eligible for the tax credit, you must have the following:
A donation that is valued at less than $500, no forms will be required to be filled out.
Charitable deductions exceeding $500 must be submitted with Form 8283, which lists the name of the organizations and types of donations made with your tax return.
Keep a receipt for your files.
Use Energy Star products
The Energy Star program of the U.S. Environment Protection Agency and the U.S. Department of Energy helps taxpayers save money when they go green. Taxpayers should be advised that not all Energy Star products qualify for the incentive and some tax breaks for energy expired in 2011. There are still a few credits available through 2021 for certain energy programs that have been mentioned above.
If you need tax help, contact us for a free consultation.
