On the 22nd of January President Obama signed into law the Haiti Charitable Deductions Bill. The law provides that if a cash contribution is made after January 11, 2010, and before March 1, 2010, for relief of victims in areas affected by the earthquake, such contribution may be treated as made on December 31, 2009. This means that such a cash contribution may be taken as a charitable contribution deduction on your 2009 income tax return.
This allows the relief to be claimed a year earlier. However, the law does not require you to take the contribution on your 2009 return and you can apply the contribution towards your 2010 tax year if this would be more beneficial to you.
Please note that to be deductible the contribution still needs to be to a qualifying US charity and also must satisfy the normal statutory requirements, such as documentation. Contributions of over $250 require written acknowledgement from the charity or evidence of a payroll deduction to be allowable.
Charitable contributions are itemized deductions taken on Schedule A of Form 1040. If you are already planning to itemize your deductions, any contribution made after January 11, 2010, and before March 1, 2010, will increase your itemized deductions for the 2009 tax year. If you usually take the standard deduction, a new cash contribution may put you above the standard deduction amounts and let you itemize to get a higher overall deduction.
For those who are both US citizens and UK residents, it may be worth considering donating through CAF. CAF are currently running a Haiti Earthquake appeal, and donations made to CAF are deductible on both your US and UK tax returns.
If you would like more information on the above, please contact your regular Frank Hirth advisor. |
