Haiti Relief and Your Tax Return

John Schacter, EA, a Boston tax accountant offers the following advice for deducting donations made to help the victims of the Haiti earthquake:

Millions of Americans have mobilized to help the people of Haiti in the aftermath of the terrible earthquake there. This month Congress passed a law that the President signed, giving taxpayers the choice of deducting donations for Haiti relief on their 2009 tax returns – even though the donation actually happened in 2010.

Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.

1. A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.
2. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
3. To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.
4. In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families.
5. The new law applies only to cash contributions.
6. Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.
7. You must itemize your deductions in order to claim these donations on your tax return.
8. You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.
9. Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development ( http://www.irs.gov/app/scripts/exit.jsp?dest=http%3A%2F%2Fwww.usaid.gov ).
10. Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. 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. Receipts should show the name of the charity, the date and amount of the contribution.
11. For more information go to http://www.irs.gov/pub/irs-pdf/p3833.pdf
    

John Schachter EA

John Schachter + Associates, Inc.

305 Newbury Street 2nd Floor

Boston, MA 02115

p 617/236-1915

f 617/236-1916

www.johnschachter.com