Senate Finance Committee chair Chuck Grassley, R-Iowa, and ranking member Max Baucus, D-Mont., announced a plan Tuesday to extend the period of time in which Americans can claim tax deductions for charitable donations to assist victims of the earthquake and tsunami that hit Southeast Asia on Dec. 26.
Under the proposal, which comes a day after President George W. Bush named former Presidents Bill Clinton and George Bush to lead a massive fund-raising drive for the disaster, taxpayers would be able to claim a tax deduction in tax year 2004 for donations made for tsunami disaster relief until Jan. 31, 2005.
Under current law, taxpayers would have to wait until next year's filing season to claim a tax deduction for tsunami-related gifts made after Dec. 31, 2004. The proposal would be limited to cash gifts made specifically for disaster relief.
"Americans are giving generously to tsunami relief, as they did after Sept. 11. I hope this extension will encourage them to give even more," Grassley said in announcing the plan. He also advised taxpayers to research charities before giving in order to make sure their donations go to legitimate groups.
