As tax time draws closer, taxpayers are reminded that any charitable donations made toward the tsunami relief effort during the month of January may be claimed on 2004 tax returns. A Jan. 7 law was intended to stimulate private donations for emergency relief in countries devastate by the Indian Ocean tsunami. It allows hte donations to be deducted as if they were made by Dec. 31.
According to a Feb. 7 report in the Cleveland Plain Dealer, the law allows only for cash contributions that were made specifically for the relief of victims in areas affected by the Dec. 26 disaster. Taxpayers have the option of deducting contributions on either their 2004 or 2005 returns, but not both.
"By claiming it this year, you can potentially increase your refund now for a donation made in the 2005 tax year," said Monnie Johnston, a certified public accountant at Kocian & Co. in Strongsville, Ohio.
Howeveer, individuals anticipating higher income this year than last – or big capital gains or any other bottom-line-boosting event – may want to hold on to the deduction to help with your 2005 taxes. The deduction does not require any additional filing forms.