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Political, Charitable, and Government Gifts

Taxes Blog - JLFranklin Wealth Planning

For many, the inauguration of a new President has sparked a renewed interest in government, politics, and making a difference. Some people find it empowering to donate to causes that serve their passions.

Did you know that you can make a tax-deductible gift to pay down the federal debt and earmark it for a specific federal agency? Below is a summary of the tax treatment for this type of donation and others.

Political Contributions

Happy with your Senator’s stand on the issues and want to reward her with a donation? That’s great. But you cannot deduct contributions made to a political candidate or campaign committee.

Charitable Contributions

The fair market value of cash and non-cash contributions is deductible. However, the deduction cannot be more than 50% of your adjusted gross income (AGI), and the contribution must be made to a qualified organization. If you’re unsure about the status of a charity, look it up on GuideStar, an online source for non-profit data. IRS Publication 561, “Determining the Value of Donated Property,” is a helpful tool for ascertaining the value of non-cash donations, such as clothing, housewares, vehicles, and stock.

Gifts to the U.S. Government

If you want to reduce the public debt, you can make a tax-deductible gift at Pay.gov. Likewise, if you are passionate about helping a specific program in the federal government, you can contribute and take a tax deduction. Here’s a partial list of agencies that could benefit from your gift:

Department of State
National Endowment for the Arts (NEA)
Veterans Affairs (VA): Veterans Health Administration
National Park Service (NPS); donate to specific parks
Marine Mammal Unusual Mortality Event Contingency Fund

Personal Gifts

Personal gifts through sites like GoFundMe or checks written to help needy individuals are never tax deductible.

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