Herrington MacFarland & McLeod

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Herrington & MacFarland, P.C.

Haiti Contributions Deduction

Certain Cash Contributions for Haiti Relief Can Be Deducted on Your 2009 Tax Return.

A new law allows you to choose to deduct certain charitable contributions of money on your 2009 tax return instead of your 2010 return. The contributions must have been made after January 11, 2010, and before March 1, 2010, for the relief of victims in areas affected by the January 12, 2010, earthquake in Haiti. Contributions of money include contributions made by cash, check, money order, credit card, charge card, debit card, or via cell phone.

The new law was enacted after the 2009 forms, instructions, and publications had already been printed. When preparing your 2009 tax return, you may complete the forms as if these contributions were made on December 31, 2009, instead of in 2010. To deduct your charitable contributions, you must itemize deductions on Schedule A (Form 1040) or Schedule A (Form 1040NR).

The contribution must be made to a qualified organization and meet all other requirements for charitable contribution deductions.  However, if you made the contribution by phone or text message, a telephone bill showing the name of the donee organization, the date of the contribution, and the amount of the contribution will satisfy the recordkeeping requirement.  Therefore, for example, if you made a $10 charitable contribution by text message that was charged to your telephone or wireless account, a bill from you telecommunications company containing this information satisfies the recordkeeping requirement.

IR Notice 1396

Making Work Pay Credit

Many individuals with earned income will qualify for the new Making Work Pay Credit in 2009 and 2010.

Individuals with earned income with a modified gross income under $75,000 ($150,000 if married filing jointly) may be eligible for a credit equal to the lesser of $400.00 or 6.2% of their earned income.

A one-time Economic Recovery Payment of $250 was made to eligible individuals in 2009.  For those individuals who received this payment, the Making Work Pay Credit is reduced by any Economic Recovery Payment received in 2009.  Individuals eligible for the Economic Recovery Payment generally included those receiving Social Security Benefits, Railroad Retirement Benefits, veterans compensation or pension benefits, and Social Security disability benefits.

Disclaimer
The above explanations are for informational purposes only and may not contain all the specifics of the provisions discussed. Clients should contact us to determine if a specific item applies to your situation.

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