Important Tax Information

2010 Haiti Earthquake Relief Contributions Deductible in 2009
New legislation has passed allowing you to deduct cash contributions made to the Haiti earthquake relief effort between January 12 and February 28, 2010 on your 2009 individual income tax return. Cash contributions include amounts charged to credit cards and amounts sent to charities by text on a cell phone. This law applies only to cash contributions; property contributions such as clothing, food, etc. will be deductible in 2010.

Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. Publication 526 has further details on the recordkeeping rules for cash contributions.

Donors should take care to make sure their contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities. Some organizations, such as churches or governments, may be qualified even if they are not listed on IRS.gov. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID. Please also note that contributions to foreign organizations generally are not deductible.

The Temporary 2010 Federal Estate Tax Repeal
Do you need to make changes to your existing estate plan? Thanks to delays in Congress, the temporary federal estate tax repeal for 2010 has actually happened, at least for now. The failure of Congress to act in a timely manner has created an unprecedented uncertainty in the world of estate planning. Although many believe that Congress will reinstate the estate tax in early 2010 and make it retroactive to January 1, 2010, nothing is definite. To learn more about how this important tax matter applies to your situation, please click HERE to read the full article!

New Roth IRA Conversion Opportunities
Many individuals will have a significant new retirement and estate planning opportunity beginning in 2010. Previously, individuals with modified adjustable gross income of more than $100,000 were not permitted to make Roth IRA conversions. The May of 2006, Tax Increase Prevention and Reconciliation Act (TIPRA), however, changed the Roth IRA conversion rules. There are many factors to consider before converting, so please click HERE to read our full advisory to find out if you are an ideal candidate.

If you have any questions regarding any of the above information or any other tax issues or questions, please do not hesitate to contact Aronson & Company at 301-231-6200.