Q: What do taxpayers need to know about their charitable contributions donated for tsunami disaster relief in Southeast Asia?
A: The devastating damages inflicted by the powerful tsunami in the Indian Ocean basin by all accounts reach epic proportions. Claiming more than 155,000 lives, creating tens of thousands of orphans and widows, washing away the most basic essentials of survival in the region, including food, clothing, shelter and medicine, the immediate humanitarian assistance and long-term reconstruction needs have triggered a global outpouring of charitable contributions. As chairman of the tax-writing Senate Finance Committee, I worked to encourage even more charitable giving by compassionate Americans as one of the first orders of business in the 109th Congress. Joining Sen. Max Baucus of Montana, I helped win swift passage of bipartisan tax legislation that would allow extra time for Americans to make cash donations towards charitable organizations orchestrating relief efforts in Southeast Asia. Passed by unanimous consent in both the U.S. Senate and House of Representatives, our bill would allow taxpayers to deduct tsunami disaster relief contributions made by Jan. 31, 2005 on their 2004 federal income tax return. Current law would have required taxpayers to wait until 2006 to claim a tax deduction for contributions made after Dec. 31, 2004.
Q: Why extend the tax deduction for an additional 30 days?
A: From the federal government to corporations and individual citizens, Americans once again are showing their big-hearted generosity when it comes to helping those in need. Giving folks an extra month to claim their cash gift as a tax deduction for the 2004 tax year will give a break to those who didn’t get their contribution made in the five days after the tsunami by Dec. 31 and encourage others to give even more. It makes me a proud American to see the overwhelming response coming from all across this country. The heart-wrenching disaster halfway around the world tugs at the heartstrings of our longstanding heritage of compassion and generosity. As Americans dig deep into their pockets, I also caution folks to take some precautions about where they send their money. Use charities with which you are familiar. Consult the Better Business Bureau Wise Giving Alliance, GuideStar, the Independent Sector and other resources, available on-line, to help guide your donation. Make sure you’re donating your money to the needy, not the greedy.