Donations to Charities Providing Relief in Haiti Qualify for 2009 Tax Deduction

February 1, 2010

The IRS announced that donations to qualified charities providing earthquake relief in Haiti, made after January 11th and before March 1st, 2010, can be claimed on 2009 tax returns. Only cash contributions qualify and the deduction may only be used for taxpayers who itemize. The cash contributions must be made specifically for the relief of victims in areas affected by the January 12th earthquake in Haiti. Taxpayers have the option of deducting these contributions on either the 2009 or 2010 tax return, but not both.

Good record keeping is key to verifying itemized deductions. A phone bill showing the donee organization receiving a text message donation, along with the date and amount of the donation, will satisfy this requirement. Other types of cash contributions can be verified with bank records, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution.

This law is modeled after the law which allowed taxpayers contributing in January, 2006, to qualified charities serving the areas affected by the December 26, 2005 tsunami in the Indian Ocean region, to deduct the contribution on either the 2005 or 2006 tax return.


IRS Extends Food Industry Tip Reporting Program

December 6, 2009

The Internal Revenue Service announced on December 1st that it is extending the Attributed Tip Income Program (ATIP) to December 31, 2011. The program was scheduled to end as of December 31, 2009.

The program simplifies the recordkeeping required for reporting tip income in the food and beverage industry. Participating employers report the tip income of employees by using a formula that uses a percentage of gross receipts, which are generally allocated among employees, based on the practices of the restaurant. Participating employees do not have to keep a daily tip log or other tip records. The IRS will not initiate a tip examination during the time the employer and employee participate in ATIP.

Employers enroll in the ATIP program by checking a box on IRS Form 8027. Employees of a participating employer need to sign an agreement with their employer to have their tip income computed under the ATIP program and reported as wages.


News That May Help

October 7, 2008

According to the IRS web page, http://www.irs.gov, you need to file a 2007 tax return by October 15th, 2008 in order to determine if you qualify for a stimulus payment for this year.  The minimum payment is $300 for a single person or $600 for a married couple filing jointly.