| Congress recently approved a bill which allows | | | | Generally speaking, you cannot claim this tax deduction |
| donations to the Haiti Earthquake Relief Effort to be | | | | if your total tax deductions for charitable contributions |
| claimed as a tax deduction on 2009 tax returns. The | | | | for the year is over 50% of your adjusted gross |
| donations must be made between January 12th and | | | | income (AGI). If you are over the limit, kudos to you for |
| February 28th, 2010. For those that have already filed | | | | being so generous! |
| their 2009 returns, rest assured, you can still amend | | | | 5) Contributing Property Can Get Confusing |
| your return to include this tax deduction. Just a little | | | | If there is a capital gain associated with the Fair |
| more paper work. | | | | Market Value of the contributed property, you could |
| Charitable Donation Rules Still Apply | | | | only contribute up to 30% of your AGI unless you |
| There are a lot of charitable donation rules so be sure | | | | choose to reduce the gain associated with the FMV |
| to review them all. | | | | of the property. In some instances, you may not be |
| 1) Maintain Supporting Documentation | | | | able to contribute more than 20% of AGI. These types |
| Please remember to safely store all of the | | | | of scenarios can get complicated so be sure to |
| documentation related to your contribution as | | | | consult with a tax specialist if you are in this situation. |
| supporting evidence. This includes a receipt from the | | | | Below are two special rules for contributing property in |
| charitable organization detailing the name of the | | | | the form of clothing and motor vehicles. |
| organization, the date, the amount of the contribution | | | | Giving Away Your Clothes or a Couch? |
| and description, if it is property. In addition, keep all bank | | | | Any clothing or household items that you donate must |
| or credit card statements that validate the contribution | | | | be in good used condition or better. If the items are |
| (refer to IRS Publication 526). | | | | greater than $500, you don't need to meet this |
| 2) You Still Must Itemize to Claim the Deduction | | | | standard as long as there is a qualified appraisal with |
| To claim the donation as a tax deduction, you must | | | | the item. |
| itemize. You cannot take the standard deduction. | | | | Donating a Car, Boat or Plane? |
| 3) Donations Must be Made to a Qualified Organization | | | | Firstly, congrats on being lucky enough to have one of |
| to be Deductible | | | | these items. Please note that if the claimed value is |
| Even if you have a friend in Haiti, you cannot claim a | | | | greater than $500, you can only deduct the lesser of |
| tax deduction for donating directly to him or her. In | | | | the gross proceeds from the sale by the organization |
| most cases, you need to make the donation directly to | | | | or the FMV of the property on the date of the |
| a qualified organization for tax deductions which include | | | | contribution. You also would need to attach Copy B of |
| nonprofit groups that are religious, charitable, | | | | Form 1098-C to your return to claim this deduction. If |
| educational, scientific, or literary in purpose, or that work | | | | the claimed value is less than $500 it is the lesser of |
| to prevent cruelty to children or animals (refer to IRS | | | | $500 or the FMV at the date of contribution. |
| Publication 78). | | | | As you can see claiming these contributions can get |
| 4) Maximum Tax Deduction for Contribution equals | | | | complicated so please review the IRS Publication 526. |
| 50% of AGI | | | | |