Running for political office means opening up your wallet, or other people's wallets, and spending money: on ads, staff, office space, mail, public appearances and sundry other expenses. If you're planning on taking these costs as a business or personal expense on your taxes, however, the IRS will take a very dim view. The short version written in the tax code has always been simple: campaign expenses are not deductible.
Out of Money, Out of Luck
Political campaigns may not deduct their expenses, a rule spelled out clearly in IRS Publication 529: Miscellaneous Deductions. This covers costs that may be deductible for an individual or a business, such as business-related mileage, advertising, insurance and salaries. A candidate may not claim or itemize personal expenses related to the campaign, or claim the money spent as a "loss" to offset business income.
Fees Aren't Free
Necessary expenses paid to run for office are not deductible, either. This would mean fees paid to a public registrar, sales tax paid on purchases, or any licenses required to set up a public appearance. If you've run afoul of the campaign laws and need some legal help, you can't deduct the cost of that, either. The general principle on deductions is that they must be expenses used to generate taxable income; since a political campaign generates only a win or a loss for a candidate, there shalt be no deductible expenses.
Candidates for the White House may draw funds from the Presidential Election Campaign Fund, which is an IRS program that directs money from the US Treasury to qualified campaigns. Individual taxpayers have the option of directing $3 of their tax money to the fund, which pays out to candidates in primary campaigns as well as the general election. The taxpayer checkoff is not technically a tax deduction, nor is the spending by the candidate deductible. Many states have their own version of this federal program.
As a candidate, you can't take a deduction on expenses or offer deductions to your donors. Political contributions are not an deductible expense for individuals or businesses, whether you send them to individual candidates or political action committees. Posing as a charity won't work either, as IRS rules bar non-profits from benefiting an individual, or a tax-exempt group from attempting to influence political campaigns or legislation as its major activity.
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.