Congress working on tax deduction for Haiti donors - Taxpayers may be able to write off cash donations made to relief efforts in Haiti on their 2009 income tax returns.
Taxpayers may be able to write off cash donations made to
relief efforts in
Haiti
on their 2009 income tax returns.The U.S. House unanimously passed a bill
Wednesday that would make donations made after Jan. 11 and before March 1
deductible for 2009.
The goal is to encourage donations beyond the $275 million already given,
according to estimates by The Chronicle of Philanthropy.
The Senate is expected to pass the bill as well. Without a change, donations
made this year couldn’t be deducted from income taxes until taxpayers
file 2010 returns. In 2005, a similar law was created to encourage donations to
victims of a tsunami in the
Indian Ocean that
happened at the end of 2004.
Contributions to U.S.-based, tax-exempt charities that provide assistance to
foreign countries can be counted as tax-deductible contributions on federal
income tax returns. Donations to foreign organizations generally are not
deductible.
Only taxpayers who itemize their deductions on Form 1040, Schedule A, can
claim deductions to charities. Regardless of the amount of a donation,
taxpayers need bank records or written communication from the charity that
shows the date and amount of their gift.
With millions collected by charities via text messages, the House bill
specified that taxpayers could use a phone bill as a receipt. Some text
donations can be verified with receipts at www.mgive.org/receipt.
Other proposals related to contributions to
Haiti
include allowing a waiver of the limit on how much of a taxpayer’s income can
be deducted in a year — if the donations are cash and specifically designated
for
Haiti
relief. The current limit is 50 percent. A corporation can donate up to 10
percent.
Another proposal is to allow corporations that donate food to relief efforts
to deduct the actual market value of the donation, rather than the cost to
produce the food.
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