by Kevin Thalersmith

Created on: February 28, 2010   Last Updated: June 30, 2010

The earthquake in Haiti was just the last of a long line of tragic events to strike the island nation.  Much of Port-au-Prince’s infrastructure fell when the earthquake hit, leaving thousands homeless and destroying the vital services needed to survive in a major city.  America and other countries from around the globe immediately moved to help out the people of Haiti.  Many people also sent in private donations, mostly in the form of money.  To encourage more people to donate money, the IRS allowed taxpayers to deduct their cash donations to Haiti. 

What can you deduct?

The IRS put some restrictions on the donations to help the relief forces gain what they needed.  As said above, only cash donations can be deducted.  The various groups in Haiti have said repeatedly they can use monetary donations much better than goods. 

These cash donations had to be made between January 11, 2010 and March 1, 2010.  Also, the IRS has a list of all the charities where donations are eligible for a tax deduction.  While some churches and other groups may not be on this list, foreign donations are usually not allowed for a deduction.  The IRS list is provided on the website under Publication 78.

How to file a deduction

All tax deductions relating to Haiti donations must be filed on a Schedule A form.  The beauty of these tax deductions come from when they can deducted.  To encourage more donations, the IRS is allowing taxpayers to choose which year they can deduct from.  Instead of automatically applying to 2010 taxes, people can use the deduction on their 2009 taxes.  That way they can get their deduction much sooner than waiting a whole year for them.  Keep in mind this deduction cannot be used for both years, but only one.

Keep Everything

In order to qualify for these deductions, it’s important to keep any item that can prove such a donation was made.  Since donations can be made using text messages, credit card, or check, there are many different ways to prove such a donation exists.  For instance, if you donated money using a text message through the service advertised on TV, details about the donation will show up on your phone bill.  Make a copy of this bill and keep it to justify making a deduction.  For more information on the information needed for deductions, check the IRS’s Publication 526.

While it’s nice to receive a tax deduction for donating to Haiti’s relief efforts, it should never be the main reason.  People should donate from the goodness of their hearts.  The horror that struck Haiti is unimaginable for most people, so the least they could do is send some money.  However, the IRS recognizes this isn’t a perfect world and no one is a saint.  That’s why they reward people who donate money to charities.  But no matter where the money comes from, every dollar counts the same way.

Source/Links

http://www.irs.gov/newsroom/article/0,id=218678,00.h tml

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