Taxpayers wishing to lend support the relief efforts in Haiti now have an additional incentive to do so, thanks to new legislation signed into law by President Obama.
The new bill gives taxpayers two options regarding monetary contributions for Haitian Earthquake Relief. They can either deduct contributions made after January 11, 2010 and before March 1, 2010 on their 2009 tax return or they can wait and claim the deduction on their 2010 return. In addition to allowing contributions to be deducted on a 2009 tax return, the bill also includes a provision that recognizes donations made to a charitable organization via text message, provided that a copy of the phone bill showing the date, time, organization name and donation amount is available.
There are several ways to make a tax-deductible contribution to a qualified charitable organization: through a cash payment, check or credit card charge or by making a payroll deduction to a charity.
Be sure to keep records of your donations. Acceptable records include a receipt from the organization that states the date, name, address, location, and amount of the donation; a cancelled check; or other bank documents that provide the same information. Don’t forget to claim all the household items and clothing you donated to your church, school, or other local charity during the year. The fair-market value of all items in good or better condition that are donated to a qualified organization are deductible. Make sure you keep a list of all items donated and their value when you contributed them. If you volunteer your time, you can also deduct out-of-pocket expenses you have that are directly related to your volunteer work.
When choosing a charity to make a donation to, keep in mind that contributions to domestic, tax-exempt organizations that provide assistance to individuals in foreign lands qualify as tax deductible contributions for federal income tax purposes, provided the U.S. organization has full control and discretion over the uses of such funds. Contributions to foreign organizations are generally not deductible. Contributions to benefit specific individuals or families are also not deductible.
You can search for qualified organizations on the Internal Revenue Service (IRS) Web site at www.irs.gov.