Under the heading “Acceleration of income tax benefits for charitable cash contributions for relief of Indian Ocean Tsunami Victims”, the senate passed a bill on January 7, 2005 allowing taxpayers who itemize their deductions and make cash donations to qualified charities for the benefit of Tsunami victims in January 2005, to treat the donations as if they had been made in the 2004 tax year.

The new law only applies to cash contributions. Additionally, to receive the beneficial treatment of the new law, the contributions must be made specifically for the relief of victims in areas affected by the Dec. 26, 2004, tsunami in the Indian Ocean.  The new law gives taxpayers the option of deducting the contributions on either their 2004 or 2005 returns, but not both.

Taxpayers that intend to take advantage of this new law should ensure that the donations are made to qualified charities. Taxpayers who have a specific charity in mind can make sure that it is a qualified charity by doing a search on www.IRS.gov.  Some organizations, such as churches or governments, may qualify even though they are not listed on www.IRS.gov.