by?Andrew D. Schwartz, CPA, Founder of The MDTAXES Network
At some point during each tax season, there is a moment when I notice a recurring trend or theme that is unique and fascinating to that specific tax season. So what is this year’s most interesting trend?
For the 2016 tax season, what I found most fascinating is the number of clients who instructed me to allocate $3 of their tax liability to the Presidential Election Campaign Fund.? With all the election craziness going on this year, more of my clients checked the Yes box in our Tax Organizer to the question about contributing to the Presidential Election Campaign Fund than have done so during all of my prior 25+ years of practice combined.
While most taxpayers aren’t even aware that this option exists, there is a box to check on the top right of the first page of the?Form 1040?to designate $3 of your federal tax liability to be earmarked for this fund. For joint filers, there is a second box for your spouse to check as well.
Please note that checking this box does not increase your tax liability by $3.? Instead, the federal government simply allocates $3 from your total tax liability to the Presidential Election Campaign Fund.
While your specific vote will probably never be the one vote to determine the outcome of an election, taking time to actually vote is critical to our democracy.? Same goes for the $3 you allocate to this fund that won’t be enough on its own to make or break anyone’s campaign.? However, having these campaign funds available might make a difference to a candidate who is neither a billionaire nor entrenched as part of the political establishment.? Who knows, maybe one day someone as far removed from the political scene as a former surgeon can go on to become president of the United States thanks in part to these public campaign funds.
According to the instructions to the Form 1040:
Presidential Election Campaign Fund
This fund helps pay for Presidential election campaigns. The fund reduces candidates’ dependence on large contributions from individuals and groups and places candidates on an equal financial footing in the general election. The fund also helps pay for pediatric medical research. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund won’t change.
Prior Year Trends:
More clients had energy efficient tax credits for purchasing solar panels, electric cars and even re-charging stations for those electric cars
A variety of tax hikes took hold causing higher taxes on lower income for high-income taxpayers
Uptick in the number of individuals taking advantage of Health Savings Accounts (HSA)
Record low interest rates meant many homeowners refinanced their home mortgages