On January 22, President Obama signed a law that could give taxpayers an early tax deduction for contributions toward earthquake relief in Haiti. Your clients will appreciate being notified about this potential deduction for their 2009 tax returns.

The new law states that if you make cash donations for earthquake relief in Haiti after January 11 and before March 1 this year, you can opt to deduct them on your 2009 tax return for a quicker tax benefit. You have to itemize deductions to benefit, and you must give to a qualified charity.

Also, if you donate by text message on your cell phone, your phone bill will substantiate your deduction as long as it gives the charity’s name and the date and amount of your contribution.

Tell clients you’ll compare their tax benefit of taking the deduction in 2009 or 2010 when you prepare their 2009 tax return. (For 2009, higher-income taxpayers have a limit on their total itemized deductions. This limit is eliminated in 2010, so the deduction may actually provide a bigger tax break if taken on a 2010 return.)

You can keep clients updated on tax law change throughout the year with the 2010 Tax Legislation website link available from Mostad & Christensen. For more details, and to view a sample, go to www.mostad.com/taxlaw.html

I invite your comments and questions. Contact me at mostad [at] mostad [dot] com or call 1-800-654-1654.