We have all watched over the last few weeks the horrific images coming from Haiti. It’s hard to imagine how difficult that would be here at home, but imagine how hard it must be in a country that struggles with the simple tasks we take for granted. They obviously could use our help.
The IRS has given us a little incentive to help out. On Jan. 22, 2010 a new law went into effect that will allow taxpayers to deduct qualifying contributions to organizations providing relief to victims in Haiti on their 2009 tax return.
The fine print
Contributions must be made after Jan. 11, 2010 and before March 1, 2010, and the taxpayer must itemize their deductions on Schedule A in order to take advantage of the benefit. Contributions must be in the form of a cash type donation, as opposed to a donation of property. Donations via text message, check, credit and debit cards are allowable. The IRS states that the taxpayer may choose either tax year 2009 or 2010 to take the deduction. Obviously, not both….the IRS frowns on double dipping!
I always tell my clients not to make charitable contributions solely based on the tax deduction. Make the donation because you choose to. This still holds true, but the flexibility to take this deduction either in 2009 or 2010 is fabulous. This is another opportunity to utilize a little forethought and tax planning to maximize tax savings…..all while helping those in need.