FYI-Haitian donations may be deductible for TY2009

[Karen Lee]

WASHINGTON - Taxpayers who make donations for Haitian earthquake victims would be able to write off this charitable deduction when they file their 2009 taxes this spring, under a bill passed by the House Wednesday.

Under current law, donors would have to wait until they file their 2010 returns next year to take the deductions. But the newly advanced bill would allow donations made by the end of February to be deducted from 2009 returns.

The bill passed on a voice vote with no opposition. Quick Senate action is expected. A similar law was enacted in 2005 for donations to victims of the Indian Ocean tsunami that happened in December 2004.

[kcjenkins]

We need to keep an eye on this, and post as soon as it is signed by the President.

[TAXBILLY]

It was signed last night (Friday).

taxbilly

[kcjenkins]

Thanks, that is good to know. I'll be careful to document any that claim it, just in case.

[TAXBILLY]

Be prepared for the unhappy clients who gave and then we have to tell them it's not deductible because they don't have enough to itemize.

taxbilly

[TAXBILLY]

New Tax Break for Contributions to Haiti Earthquake Relief

A new tax relief law allows people who contributed in 2010 to charities providing earthquake relief in Haiti to take a tax deduction for the contribution on their 2009 tax return instead of their 2010 return. This means you can receive an immediate tax benefit, rather than having to wait until you file next year’s return. Certain requirements apply:

Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.

The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.

You may deduct these contributions on either your 2009 or 2010 returns, but not both.

In addition, the general rules about tax deductions for charitable donations apply:

You must itemize your deductions on Schedule A; those claiming the standard deduction, including all short-form filers, are not eligible.

You must keep a record of any deductible donations you make.

For donations by text message, a telephone bill will meet the requirement if it shows the name of the donee organization and the date and amount of the contribution.

For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution.

Contributions to foreign organizations generally are not deductible.

Make sure your contribution goes to a qualified charity. Most organizations eligible to receive tax-deductible donations are listed in a searchable, online database available under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they’re not listed on IRS.gov.

Related Item: Publication 526, Charitable Contributions

[Margaret CPA in OH]

For those who might complain that they don't get a deduction, one might just thank them for the generous spirit which motivated their contribution.