On January 22, 2010, President Obama signed a bill into law that established special rules for charitable donations made towards the Haitian relief efforts. The new law allows individuals who make qualified charitable donations to Haitian relief efforts, the ability to deduct those donations on their 2009 tax return. Under the normal rules, charitable donations are deductible in the tax year that they are made. This law allows individuals to choose to deduct their 2010 donations in 2009 or 2010.
In order to take the deduction in 2009, the charitable donations must be made:
* After January 11, 2010 and before March 1, 2010,
* Specifically for the relief of those in the areas affected by the earthquake in Haiti on January 12, 2010,
* In cash (as opposed to property), and
* To qualified charities as defined by the IRS. (Note: donations to foreign organizations are not usually deductible according to the IRS' guidelines for charitable contributions.)
In addition, the rules under this law are only available to those who itemize their deductions on Form 1040, Schedule A. If you take the Standard Deduction on your federal tax return you would not be allowed to take advantage of these special rules.
Keep in mind that other than having the ability to deduct these qualified charitable donations in 2009, all of the other IRS rules and limitations for charitable contributions still apply.
If you meet the criteria for taking this deduction, be sure to keep the necessary documentation of your donation such as receipts and cancelled checks. If you made donations via text messaging, the IRS will allow you to use your phone bill as supporting documentation if the phone bill has the name of the donee organization, the date of the donation and the amount of the donation.
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