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High-income taxpayers won’t lose otherwise allowable charitable itemized deductions in 2010, 2011, and 2012

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President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 into law Dec. 17, 2010.

Prior to 2010 the total amount of otherwise allowable itemized deductions on the federal income-tax return was limited for high-income taxpayers (other than medical expenses, investment interest, and casualty, theft, or wagering losses). This “haircut” meant that some high-income taxpayers were not able to take all of their otherwise allowable itemized charitable deductions. The Internal Revenue Code section that provided for this limitation was repealed on Dec. 31, 2009, but would have returned on Jan. 1, 2011.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the repeal of this provision through Dec. 31, 2012.

2012 is a great year for high-income taxpayers to support what they love at The University of Texas at Austin. For those considering converting a traditional IRA to a Roth IRA, the extra income reported could be partially offset by the itemized charitable deduction without fear of losing some or most of the deduction.

Contact the Gift Planning team for information about the many ways you can support The University of Texas at Austin. You can contact the team at 866-488-3927 (toll free) or

E-mail: giftplan@www.utexas.edu.

Web: giving.utexas.edu/giftplanning.

IRS Circular 230 Notice: The University of Texas at Austin does not provide legal, tax, or financial advice. Consequently we urge you to seek the advice of your own legal, tax, or financial professionals in connection with gift and planning matters. This information is not intended to be used and cannot be used for the purpose of avoiding tax-related penalties.