The Time to Deduct

Congress has just passed a bill which lets taxpayers deduct this month’s donations to tsunami relief on their 2004 taxes.  I think this is a good idea but why stop at one month and why stop at tsunami relief?  Taxpayers can deduct IRA contributions from their previous years taxes up until April 15, why not allow the same thing for charitable deductions?

    Allowing deductions to be made at the same time as taxes are paid will help individuals to make better decisions because it is much easier to examine the donation-tax tradeoff when you are doing your taxes in April than in the previous year when you are making your donations.  Today, in contrast, you have to make your charitable donations at least 4 and a half months before the tradeoff becomes salient.


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