01/25/2010

As we told you last week, the House of Representatives had sent HR 4462 to the Senate for approval. HR 4462 permits us all to choose to take a deduction on our 2009 returns for contributions made for Haiti relief in 2010–thus accelerating our tax deduction by a whole year. Late last week the Senate by voice vote approved it. The bill will be on the President’s desk for signature which is anticipated this week.

Contributions you make NOW (between January 11 and March 1) can be claimed as a deduction on your 2009 tax return if you itemize your deductions. This special rule applies only to MONEY Haitian relief contributions (as opposed to “stuff”). If you make the contribution by credit card, the statement showing the organization and the date of the donation suffice as proof. If you make a contribution over the telephone, the IRS is saying that for THIS TIME ONLY, your phone bill will suffice IF it shows the name of the donee organization, the date of the contribution, and the amount of the contribution. This will be true only if you gave via your cell phone by hitting a combination of numbers for the “automatic” gift. The donation will appear as an amount due on your cell phone bill. For all contributions other than the cell phone gifts, organizations will provide you with a letter, but because of the volume of activity, organizations may be slow to respond with documentation. NOTE: If you made a one-event gift of $250 or more, the organization is required to give you a receipt – so watch for it and put it in your 2009 tax documents. And remember, only contributions made to US organizations are deductible. Gifts made to foreign organizations or individuals/families are NEVER deductible and there is no exception this time either. See our Blog on January 20 for more information.

FOR TAX RETURN PREPARATION: Let us know if you have made a contribution to Haiti relief so we can include it on the 2009 return. But keep in mind that YOU DO NOT HAVE TO TAKE THE DEDUCTION ON YOUR 2009 TAX RETURN. You can wait until you file your 2010 return. Why would you want to wait? If this is a year that you will not itemize your deductions but you think that you will in 2010 (ie you are buying your first home in 2010 and will have mortgage interest deduction for the first time), save the contribution to deduct on your 2010 return.