House OK's deductions for Haiti on '09 taxes

NEW YORK (CNNMoney.com) -- The House unanimously approved a measure Wednesday that will allow taxpayers to deduct cash donations to Haiti earthquake relief on their 2009 tax returns instead of having to wait to file the claims next year.

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

The bill also allows contributions made through text messages to be deducted if cell phone bills are provided as proof of donation.

Committee chairman Charles Rangel, D-N.Y., said in a statement that the committee "developed this legislation to make it easier, and encourage people, to donate to the relief efforts in Haiti."

Leaders from the Senate Finance Committee introduced an identical version of the bill Wednesday afternoon. A floor vote is expected later in the day.

"This bill is a clear signal Americans want to help Haiti battle back from crisis," committee chairman Max Baucus, D-Mont., said in a statement.

Similar legislation, which Baucus said was "successful," 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.