Haiti’s Earthquake Relief Deductible in 2009

On January 21, 2010 the Senate unanimously passed a bill that will allow taxpayers to deduct cash donations made to Haiti’s earthquake relief on their 2009 taxes.

Contributions made between January 12, 2010 and February 28, 2010 are deductable on 2009 taxes. Contributions made via text messages are also deductable with proof of donation provided from cell phone bills (Federal law requires that taxpayers keep a record of any deductible donations made). The contributions to the relief effort in Haiti will count as an itemized charitable deduction (when an individual exceeds the standard deduction, one may take itemized deductions).

For 2009, the standard deduction for those 65 years old and under is $11,400 if married filing jointly, $8,350 if head of household, $5,700 if single and $5,700 if married filing separately. If the adjusted gross income for 2009 tops $166,800 if married filing jointly or $83,400 if married and filing separately, the charitable contribution is subject to the reduction of itemized contributions, which usually equates to 1%.

Taxpayers are to make certain that their contributions go to qualified charities. The IRS reminds donors that contributions to foreign organizations generally are not deductible but that this special Haitian relief provision is much like that of the 2005 Indian Ocean Tsunami provision. The 2005 law allowed taxpayers qualifying donations they made during January 2005 to be deducted in 2004 returns.

In most cases such charitable contributions count toward the year in which they are made. Thanks to this special legislation, taxpayers are provided an immediate benefit; they will not have to wait until next year to claim the benefit on their 2010 tax returns.

For more specific information from the Internal Revenue Service:  http://www.irs.gov/newsroom/article/0,,id=218678,00.html?portlet=7   

Please contact Feeley & Driscoll's Accountants and Consultants by Email or call 1 (888) 875-9770 to learn more.

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