Friday, October 3, 2008
Just three days ago we blogged about the unlikehood that Congress would be able to agree upon and pass the charity tax bill before adjournment. Senators resolved the problem by adding the charitable provisions to the bailout bill, signed by Pres. Bush on Friday. The charitable provisions include an extension of the ability of a taxpayer older than 70 1/2 to contribute up to $100,000 to an IRA without income tax and extensions or renewals of breaks for businesses that contribute books or computers to schools. The bill creates tax incentives for donations to help victims of recent floods, tornados and storms in the Midwest, and volunteers who help with disaster relief in the Midwest can deduct mileage at the rate of 42 cents a mile, until the end of 2008. That amount is 70% of the business rate (58.5 cents) but significantly more than the rate for charitable activities (14 cents a mile). The Chronicle of Philanthropy reported on the charity provisions of the tax bill.