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January 30, 2009

Revised IRS Publication Explains Latest Charitable-Contribution Rules

In a revised guide for taxpayers, the Internal Revenue Service explains how people who used their cars to help charities provide disaster relief during Midwestern storms last year can take an increased deduction for the miles they drove.

Each year in its Publication 526, “Charitable Contributions,” the IRS tells taxpayers how to claim deductions for contributions, describes organizations that are qualified to receive deductible gifts, and explains the effects of changes in federal law.

The newly revised publication, for use in preparing 2008 tax returns, describes how a federal law enacted last fall provided tax incentives for charitable giving to help victims of summer storms, tornadoes, and floods in the Midwest.

For example, people who used their cars to provide disaster relief in the Midwest can deduct up to 41 cents per mile, depending on the date of their volunteer work. The usual charitable mileage rate is 14 cents per mile.

Volunteers in the Midwest can also exclude from their income any reimbursements from charities for the use of their vehicles, up to the amount of the standard business rate in effect at the time.

The revised Publication 526 also details how the federal law enacted last fall allows people older than age 70½ to give up to $100,000 to charity from their individual retirement accounts each year without paying income taxes on the money. That provision had expired at the end of 2007 but was renewed for 2008 and 2009.

— Grant Williams

Friday January 30, 2009 | Permalink

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