Tsunami Tax Deduction Could Go on 2004 Returns

Taxpayers would be able to claim deductions for contributions to tsunami relief efforts (search) on their 2004 tax returns under legislation introduced Tuesday by the chairman and top Democrat on the Senate Finance Committee.

The bill, sponsored by Finance Committee (search) Chairman Charles Grassley, R-Iowa, and Sen. Max Baucus, D-Mont., would allow charitable contributions (search) for tsunami relief made through the month of January to be claimed as deductions on taxpayers' 2004 tax returns.

Normally, any donations made in 2005 could not be claimed until taxpayers filed their 2005 tax returns a year from now.

Both Grassley and Baucus said they hoped legislation to extend the deduction deadline until Jan. 31 would bolster support for the private relief effort that is being led by former presidents George H.W. Bush (search) and Bill Clinton (search).

"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 a statement.

"This proposal allows American companies and individuals to receive their deduction now rather than having to wait until next year to claim it, " Baucus said.

Aides to both senators predicted quick congressional passage for the measure.