Tax Tips

Giving to Haiti?
There's a Tax Benefit, Too

Itemizers don’t have to wait until they file their 2010 returns, but some might want to.

By Mary Beth Franklin, Senior Editor, Kiplinger's Personal Finance

January 25, 2010

If you donated money to one of the many Haiti disaster relief efforts in the wake of the January 12 earthquake, you may be able to claim a deduction when you file your 2009 tax return this year.

Normally, contributions to qualified charities are deductible only for the tax year in which the contribution was made. But a new law enacted on Jan. 22 permits taxpayers who itemize their deductions to claim the write-off on their 2009 tax returns.

The new rule allows individuals who make a monetary donation to a qualified charity for the relief of victims of the Haiti earthquake after January 11, 2010, and before March 1, 2010, to claim the contribution as a deduction on either their 2009 or 2010 federal income-tax return, but not both. Generally you must have a bank record, credit-card statement or written acknowledgment from the charity to substantiate your deduction. But if you made your donation via text message -- a new fund-raising phenomenon triggered by the recent disaster -- you can use your cell-phone bill to document your donation as long as it shows the name of the charity and the date and amount of your contribution.

Many taxpayers welcome the chance to accelerate the tax deduction for their charitable contribution, but high-income taxpayers may want to wait to claim it on their 2010 return. That’s because for 2009, taxpayers with adjusted gross incomes of more than $166,800 ($83,400 for married couples filing separately) have to forfeit a portion of their itemized deductions. That rule is repealed for 2010.

There is no tax break for donors who do not itemize their deductions. About 70% of U.S. taxpayers don’t itemize, claiming the standard deduction instead.

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