President Bush signed legislation that provides $6.1 billion tax relief for people and businesses reeling from Hurricane Katrina. While most of the tax-law changes apply to those in the hard-hit Gulf region, some breaks extend to charity-minded taxpayers throughout the country.
First, let's look at tax breaks available to those not directly affected by the disaster:
Charity donation caps lifted. Typically, your charitable-donation deductions are limited to 50 percent of your adjusted gross income (AGI). The new law eliminates that cap, as well as the charity-deduction limit for donations made by high-income taxpayers. These tax breaks apply to cash or check donations made to public charities after
Aug. 27 and before Jan. 1, 2006.
Advice: Pile on charitable donations before year-end. These provisions aren't restricted to donations for Katrina relief; they apply to all cash or check donations to IRS-approved pub...(register to read more)