Donations to Haiti as part of earthquake relief is now tax deductible this season, according to the Internal Revenue System (IRS). This special tax relief provision was enacted on January 22, 2010. Taxpayers who itemize deductions on their 2009 returns qualify for this special provision. Those who claim the standard deduction do not qualify. This includes all short form fillers.
According to the new provision, any cash contribution made to IRS approved charities or organizations after January 11, 2010 and before March 1, 2010 is eligible. This refers specifically to contributions made to affected areas in Haiti. Cash contributions include contributions made by check, credit or debit card, and text messages.
Taxpayers will benefit immediately by filing their 2009 returns early, filing electronically and choosing direct deposit. You can receive a refund in, as early as, 10 days of filing returns and they can be transferred directly to a savings, deposit or brokerage account.
Taxpayers can deduct their contributions either in 2009 or 2010 but not both. They can file their itemized deductions as per Schedule A (http://www.irs.gov/pub/irs-pdf/f1040sa.pdf)
Any non cash contribution made in the form of goods, or services, merchandize or property does not qualify. Admission fees to any banquet, charity on sporting event as part of relief activity is also not eligible.
IRS requires that you retain proof of all cash contribution. For example, if you sent a text message, then your telephone bill will be sufficient if it provides the name of the organization you have donated to, the date and the amount. In case you sent a check or made contributions by any other means, please retain records such as a cancelled check, and bank or credit card statements. Also keep receipts from the charity you donated to. The receipt should show the name of the charity, the date and the amount.
If you would like more information on recordkeeping rules for cash contributions, you can refer to Publication 526 (http://www.irs.gov/pub/irs-pdf/p526.pdf)
Contributions to foreign organizations or any charity not recognized by the IRS is not deductible. To get a list of charities or organizations qualified to receive tax deductible donations, please refer to the IRS online database at http://www.irs.gov/charities/article/0,,id=96136,00.html
You may not find some churches or organizations in this list but you can still contribute to them and qualify for tax deductions. Therefore, you may want to check with agencies such as USAID, to get a more comprehensive list of organizations helping victims in the affected areas in Haiti.
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