Katrina Emergency Tax Relief Act of 2005 Offers Considerable Tax Benefits for Charitable Contributions

Special Tax Breaks for Charity-related Mileage, Housing of Displaced Hurricane Victims and Cash Contributions

PARSIPPANY, N.J., Sept. 28 /PRNewswire-FirstCall/ -- President Bush recently signed the Katrina Emergency Tax Relief Act of 2005 (KETRA), providing a number of tax benefits for victims of Hurricane Katrina. Jackson Hewitt Tax Service(R) (NYSE:JTX) explains how the act also benefits charitable contributors and volunteers with special tax breaks, including an increased charity-related mileage rate, additional personal exemption amounts for the housing of individuals displaced by Hurricane Katrina and greater deductible amounts for cash contributions.

"Making a charitable donation or volunteering your time are just two ways that you can help those affected by Hurricane Katrina," said Mark Steber, Vice President of Tax Resources at Jackson Hewitt Tax Service. "This new tax relief act is an added incentive for taxpayers nationwide to come together and assist in the clean up and rebuilding of the Gulf Coast area."

The charity-related highlights of KETRA include:

Mileage

* A temporary increase in the charity-related mileage rate for taxpayers
who use their personal vehicle for Hurricane Katrina relief efforts.
Taxpayers will be allowed to deduct up to 34 cents a mile (up from 14
cents previously) for personal vehicle expenses related to Hurricane
Katrina.

* The bill also allows taxpayers to be reimbursed for personal vehicle
expenses related to the Hurricane Katrina relief efforts up to the
business mileage rate of 48.5 cents per mile, with no tax consequence.

* For example, the deduction for driving 1,000 miles to teach as a
volunteer for a literacy program would be $140 because 14 cents is the
standard charitable mileage rate. The deduction for 1,000 miles as
result of driving to collect food and water donations for a church's
Hurricane Katrina Relief Drive would be up to $340 under the new KETRA,
which is a maximum of 34 cents per mile.

Providing Housing

* The provision allows a taxpayer who uses their personal residence to
house individuals displaced by Hurricane Katrina to receive an
additional personal exemption of $500 (maximum of $2,000 deduction) for
each displaced person. The individual must stay a minimum of 60 days
in the taxpayer's home and may not be a spouse or otherwise qualify as
a dependent. The deduction is available in 2005 and 2006, but cannot
be claimed in respect to the same individual in both years.

* For example, if a taxpayer in Utah provided housing to their cousin,
his wife and their two children, all of whom were displaced due to the
Hurricane Katrina disaster from September 1, 2005 until February 1,
2006, the taxpayer would qualify for an additional $2,000 deduction on
their 2005 income tax return.

Cash Contributions

* The deduction for cash charitable contributions was limited to 50
percent of a taxpayer's adjusted gross income for the year. The
provision waives the individual income limits for cash contributions
for Hurricane Katrina relief for years ending December 31, 2005.

"With the new tax relief act in place, it really does pay to contribute to a qualified charitable organization providing assistance in the wake of Hurricane Katrina, such as the American Red Cross or the Salvation Army," adds Steber.

Jackson Hewitt has partnered with the American Red Cross to provide a way for everyone to make a donation to help Hurricane Katrina victims through a secure link on its corporate website -- http://www.jacksonhewitt.com/.

About Jackson Hewitt Tax Service Inc.

Jackson Hewitt Tax Service Inc. (NYSE:JTX) is the second largest tax preparation service company in the United States, with over 5,400 franchised and company-owned offices in 49 states and the District of Columbia. Specializing in electronic filing (IRS e-file), the Company provides full service, individual federal and state income tax preparation and facilitates related financial products. Most Jackson Hewitt offices are independently owned and operated. Jackson Hewitt is based in Parsippany, New Jersey. More information about the Company may be obtained by visiting the Company's Web site at http://www.jacksonhewitt.com/.