Three major Hurricane Katrina-related philanthropic tax law changes may help Mississippi taxpayers as they file their 2005 Internal Revenue Service (IRS) tax returns.
"Mississippi taxpayers who were so generous to Hurricane Katrina victims now may receive some help through the Gulf Opportunity tax law changes made to encourage rebuilding and economic recovery," said Robert Latham, director of the Mississippi Emergency Management Agency (MEMA).
Mississippi residents meeting specific eligibility requirements may claim up to $2,000 in additional exemptions if they opened their home to hurricane victims. The exemptions are limited to $500 per person up to a maximum of four persons sheltered. The storm evacuees must have stayed in the owner's primary residence for 60 consecutive days.
A second break applies to taxpayers who provided volunteer transportation services for hurricane relief efforts. Usually, volunteer mileage is deducted at a 14-cents-per-mile rate. However, the new tax law allows up to 34-cents-per-mile for Katrina recovery efforts.
Because of specific eligibility requirements, taxpayers should check with the IRS to determine which rate applies to their donated mileage.
Finally, lawmakers suspended the limits on monetary gifts to charitable organizations made during the last part of 2005. Usually taxpayers cannot contribute more than 50 percent of their adjusted gross income.
The Hurricane Katrina tax legislation removes amount limits for monetary gifts made between Aug. 28 and Dec. 31, 2005, regardless of the charity's cause.
"The IRS wants to ensure that individuals who provided assistance and support to hurricane evacuees do not miss out on tax benefits available to them," said IRS Spokesman Mark Green.
The IRS provides help for those affected by Hurricane Katrina, as well as survivors and personal representatives of the victims. A special toll-free disaster hotline is available for those having trouble filing or paying their taxes or have other tax issues related to the 2005 hurricanes.
Call 1-866-562-5227 Monday through Friday
In English: 7 a.m. to 10 p.m. local time
In Spanish: 8 a.m. to 9:30 p.m. local time