Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Haiti donation could lower 2009 tax bills

By Alexandra Twin, senior writer


NEW YORK (CNNMoney.com) -- Taxpayers may be able to deduct cash donations to Haiti earthquake relief on their 2009 tax returns if Congress passes a measure expected to be taken up this week.

Leaders of the House Ways and Means Committee from both parties said Friday they will introduce a bill that makes contributions made between Jan. 12 and Feb. 28 count toward an individual's or family's 2009 taxes.

The average taxpayer got a refund of $2,753 last year. How do you think your 2009 tax bill will compare?
  • I'll get a refund of at least $2,700
  • I'll get a refund, but less than $2,700
  • I'll owe less than $2,700
  • I'll owe more than $2,700
CDs & Money Market
MMA 0.25%
$10K MMA 0.24%
6 month CD 0.33%
1 yr CD 0.57%
5 yr CD 1.20%

Find personalized rates:
 

Rates provided by Bankrate.com.

Committee chairman Charles B. Rangel, D-N.Y., and ranking minority member Dave Camp, R-Mich., are expected to introduce the bill Tuesday when Congress reconvenes.

"This measure provides an immediate benefit for those who have already given and incentive for those who are considering a charitable contribution," Rangel said in a prepared statement.

Similar legislation was passed in 2005 to boost contributions in the aftermath of the Indian Ocean tsunami that occurred in late 2004.

Typically, charitable contributions count toward the year in which they are made. The current measure would mean taxpayers don't have to wait until next year to claim the benefit on their 2010 tax returns.

Factoring in the deduction: The Haiti relief contribution would count as an itemized charitable deduction. Itemized deductions are typically taken when an individual exceeds the standard deduction.

For 2009, the standard deduction for those 65 and under is $11,400 if married filing jointly or a qualifying widow, $8,350 if filing as a head of household, $5,700 if single and $5,700 if married filing separately.

If your adjusted gross income for 2009 tops $166,800 or $83,400 if married and filing separately, your charitable contribution is subject to the reduction of itemized contributions, usually 1%.

For cash contributions, the deducted ceiling is typically 50% of adjusted gross income, although in 2005, Congress passed legislation allowing 100% of income. To top of page

 
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.39%3.41%
15 yr fixed2.67%2.68%
5/1 ARM2.84%2.85%
30 yr refi3.41%3.44%
15 yr refi2.69%2.72%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,481.48 -65.82 -0.35%
Nasdaq 5,217.70 -42.38 -0.81%
S&P 500 2,175.44 -11.46 -0.52%
Treasuries 1.56 0.01 0.39%
Data as of 11:03pm ET
Company Price Change % Change
Bank of America Corp... 15.40 0.05 0.33%
Chesapeake Energy Co... 6.26 -0.20 -3.10%
Freeport-McMoRan Inc... 11.08 -0.90 -7.51%
Micron Technology In... 15.51 -0.67 -4.14%
Cisco Systems Inc 31.06 0.08 0.26%
Data as of 4:02pm ET

Sections

The U.K. is preparing to split from the European Union, which means about $1.3 trillion in trading relationships will have to be reset. More

Facebook CEO Mark Zuckerberg is going to Rome to hold a live Q&A Monday, following this week's large earthquake. More

Just 15 states are paying enough into their public pension funds to both pay promised benefits to retirees and pay down pension debt. More