Charitable giving, as we’ve noted here, here, and elsewhere, is a tricky animal. Much of the giving that is considered pure altruism is in fact incentivized by a variety of factors. As we note in SuperFreakonomics, “U.S. citizens are easily the world’s leaders in per-capita charitable contributions, but the U.S. tax code is among the most generous in allowing deductions for those contributions.”
Consider the following example, an e-mail sent out by an accounting firm. The donation-by-text exception toward the end is particularly interesting:
2010 Haiti Donations Deductible In 2009
On January 22, President Obama signed into law a provision which allows Taxpayers who itemize deductions on their 2009 returns to claim a charitable contribution deduction for donations made after January 11th and before March 1st, for the relief of victims in areas affected by the recent earthquake in Haiti. This provision should promote timely giving to Haiti in the days ahead and weeks ahead when the region needs it the most.
Taxpayers contemplating making a contribution to help victims of the earthquake in Haiti should consider doing so before March 1, 2010 to take advantage of this special tax relief. Taxpayers can choose to deduct qualifying Haiti earthquake relief donations on either 2009 or 2010 returns, but the same item cannot be claimed on both years. The Taxpayer should choose to deduct the contribution in the year that produces the greatest tax savings.
To get the tax benefit, Taxpayers must itemize deductions on Schedule A. Those who claim a standard deduction, including short-form filers, are not eligible.
To qualify for acceleration, the contribution must be cash (not property), text message, check, credit or debit card and must be made specifically for the relief of victims in the areas affected by the January 12th earthquake in Haiti. Taxpayers must also make sure their contributions go to qualified charities. The Internal Revenue Service maintains a database on IRS.gov of most organizations that are eligible to receive tax-deductible donations. Contributions to foreign organizations generally are not deductible.
For donations made by text message, the IRS has eased the substantiation requirement. Taxpayers will meet their record keeping requirement by maintaining a telephone bill that shows the name of the donee organization, the date of the contribution, and the amount of the contribution.