Monetary donations given to legitimate charitable organizations or tsunami disaster relief by Jan. 31, such as the Southern Baptist International Mission Board, may be itemized as deductions for the 2004 tax year, according to a new law signed by President Bush.
Contributions made during January 2005 may be deducted as if they were made Dec. 31, 2004, according to the IRS website.
"There are no extra forms to fill out or any additional burdens for taxpayers," IRS Commissioner Mark W. Everson said. "As long as you send your check by the end of the month, the donation will be treated just like it was still 2004." Monetary contributions via credit card by Jan. 31 also qualify, USA Today "Managing Your Money" columnist Sandra Block has noted.
The law, signed by the president Jan. 7, allows only for monetary contributions made specifically for the relief of victims in areas affected by the Dec. 26 tsunami in the Indian Ocean.
Donors are urged to be sure they are giving to a qualified charity, and the IRS has provided a search at www.irs.gov so that people may check to see if the particular charity is legitimate. However, some organizations such as churches may be qualified even though they are not listed, the IRS said.
People who make contributions should note on their records that the money is for tsunami relief efforts.
According to Block, "For donations of less than $250, you're required to keep a canceled check or receipt from the charity in your records. For donations of $230 or more, you need a written acknowledgement from the charity. You don't need to attach these documents to your tax return, but you should keep them for your records in case the IRS questions your return."
The new IRS rule gives taxpayers the option of deducting contributions for the 2004 tax year but does not require them to do so. If a person would prefer to count the contribution for the 2005 tax year, he should proceed as usual.
As of Jan. 18, Southern Baptists and others had contributed more than $3 million to help tsunami survivors. Gifts for the relief effort may be sent to "Asia Earthquake Disaster Relief," International Mission Board, P.O. Box 6767, Richmond, VA 23230 (to give online, go to www.imb.org, and click on "Give Now" in the box highlighting this story). All funds given will be used in relief efforts. None will be used for administrative or promotional purposes.
For more information, visit www.irs.gov.
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