 |
|
 |
|
|
|
|
|
 |
|
|
|
|
|
Contributing to Haitian Relief?
Ryan M. Bray, MST, CPA
Senior Manager, Tax Services; with contributions from Madalina Dobra
January 25, 2010
200,000 people feared dead, water and sewage systems destroyed, the port and other infrastructure damaged, a third of the buildings in the capital city demolished―all this and more from a 7.0 earthquake lasting just seconds.
Even before the quake, Haiti, the poorest nation in the Western hemisphere, was struggling to recover from damages caused by four successive hurricanes in 2008. Now, its current and anticipated future needs for assistance are massive.
Not surprisingly, the initial concern―and charitable impulse―was for saving lives and providing immediate access to food, water, medical services, and shelter. However, according to earthquake and disaster experts, the country needs long-term assistance if it is to rebuild its government, infrastructure, and the lives of its citizens.
Americans, along with the citizens of many other countries, have responded generously to the crisis in Haiti. To support your donations, the IRS designated the earthquake as a qualified disaster for federal tax purposes and Congress passed legislation to provide a more immediate tax benefit to those who contribute to the relief effort.
Tax Rules Governing Your Charitable Donations to Haitian Relief
Your contributions to qualified charities are generally deductible on your federal income tax return for the year in which you make the contribution. However, if you donate to Haitian relief after January 11 and before March 1, 2010, Congress has passed legislation that allows you to elect to deduct your charitable contribution on your 2009 federal tax return. It also allows you to use your phone bill as a receipt to support your tax deduction if you made the donation by text message.
The IRS has issued guidance that, for federal tax purposes, the earthquake in Haiti qualifies as a disaster. As a result, recipients of qualified disaster relief payments do not have to report the payments as income for federal tax purposes. Generally, such payments are for personal living expenses, funeral expenses, and repairs to a residence or replacement of personal property not covered by insurance.
Also according to the IRS, employer-sponsored private foundations that make payments to employees and their families victimized by the quake can treat those payments as made for a charitable purpose. They will not result in prohibited self-dealing. Further, the employee is not required to report the payments as taxable compensation.
Avoiding Fraud
Unfortunately, as is often the case with major disasters, there are unscrupulous people intent on taking advantage of your generosity. It's generally safest to give to charities that you've had personal experience with or to charities that are nationally and internationally recognized. Also, make sure you have some form of written documentation or receipt to support your donation―even if you donate online or by text message.
The IRS provides an online Search for Charities function to help you determine if the charity you intend to support is included on its list of organizations eligible to receive tax-deductible charitable contributions. You should note that certain churches and governmental organizations that are not listed may also be qualified to accept charitable contributions.
The IRS website includes a Disaster Relief―Resources for Charities and Contributors page with resources to guide you in providing disaster relief through charities.
There are a number of other online resources to help you evaluate organizations that seek your donation, including GuideStar, which also provides tips for giving to Haitian relief and a list of organizations working in Haiti.
For More Information or to Donate to the Haitian Relief Effort
The White House website provides a centralized resource for information about the relief effort, as well as options to contribute and to locate family and friends in Haiti.
You'll also find current information and options for email updates and donations on the website of the Clinton Bush Haiti Fund.
Google has compiled an online list of organizations accepting cash and in-kind donations, as well as organizations accepting donations via text message.
The websites of many major charities and aid organizations―including the American Red Cross, World Vision, Save the Children, Feed the Children, World Food Program, Habitat for Humanity, and Doctors Without Borders―contain updates regarding their efforts to help the Haitian people, along with ways you can contribute.
|
|
|
|
|
|
|
|
|
|
|
|
|
