taxes

How the new tax law affects your 2010 taxes

Can I still deduct my home's property taxes if I take the standard deduction?

Sorry. This home-related tax break wasn't part of the new tax package. In previous tax years, the last one being 2009, homeowners could add up to $500 (or $1,000 if married filing jointly) in residential real estate taxes to their standard deduction amount. That tax break ended on Dec. 31, 2009, and was not extended.

I'd like to donate some of my IRA money to a charity. Can I do that?

Older, generous owners of traditional IRAs are in luck. The ability for folks age 70½ or older to directly donate up to $100,000 per year from their IRA to a qualified charity is back on the tax books. This is a particularly appealing tax move for individuals facing a required minimum distribution, or RMD. This is a specific amount, based on the retirement account owner's age, that must be taken out of tax-deferred retirement accounts each year.

Now an RMD, and more as long as it doesn't exceed $100,000, can go directly to a charity so that the IRA owner follows the distribution rule but doesn't have to count the donated money as taxable income.

And because of the lateness in getting this law back in the tax code, the new bill provides a grace period. Eligible IRA owners will be able to make their retirement account charitable donations in January 2011 and have the distributions count as if they were made for the 2010 tax year.

There's even better news for all these reinstated tax breaks. Taxpayers won't have to worry about their status next year. In addition to putting the deductions back in place for 2010, the new tax bill extends them through the 2011 tax year.

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