BOSTON — The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that President Barack Obama signed into law last year might not make for great bedtime reading. But that doesn’t mean you shouldn’t examine some of the retirement-planning opportunities contained in what’s known as the 2010 Tax Relief Act. Here’s a recap of what experts suggest you might do with your retirement accounts.

TAKE THE TWO-YEAR DEAL ON ROTH IRA CONVERSION: The Bush era tax cuts — as most astute taxpayers know — have been extended through 2012. The rates for 2011 and 2012 will remain the same, but the brackets themselves are slightly higher due to the built-in inflation adjustments, according to Ed Slott, CPA, who edits a newsletter on IRA savings.

“One key group of people who benefit substantially from the extension of the tax cuts are those individuals who converted traditional IRAs to Roth IRAs in 2010, the first year when high-income IRA owners could make Roth conversions,” Slott wrote in his most recent newsletter. “For those 2010 conversions, a special option was available allowing all the income from the conversion to be split equally over 2011 and 2012 — or all the income could be included in 2010.”

Now, in 2011, Slott wrote that those who did Roth IRA conversion must finally decide which option to choose. (You must make the choice by the due date for the 2010 tax return, including extensions, and once it’s made, it’s irrevocable, Slott wrote.)

“Before the tax cuts were extended, this was going to be a difficult decision for many (IRA owners who did a Roth conversion), particularly those at higher incomes. Pay now for 2010 at lower rates, or defer the liability to 2012 and 2013 for 2011 and 2012, but pay at potentially higher rates,” Slott wrote. “Under the new tax law, the debate is now substantially simplified and deferring the income from a 2010 conversion equally over 2011 and 2012 becomes the best option for most of those who did a Roth IRA conversion, all other factors being equal.”

Others agreed. “Most individuals who converted to Roth IRAs in 2010 will now be better off taking the “two-year deal” and splitting the conversion income equally over 2011 and 2012 since they will have a longer period of time to pay taxes at the same, extended low rates,” said Matthew Curfman, a senior vice president with Richmond Brothers.

There’s one other move to consider as well, according to Laura Collins, president of Provident Financial Group of the Carolinas. “For individuals who were not able to take advantage of the special Roth conversion rule in 2010, which allowed them to spread the tax burden over two years, this now provides an additional planning opportunity this year and next,” she said. “Even though the special Roth conversion rule was not extended for 2011, the uncapped modified adjusted gross income or MAGI was. So, high income earners can still convert to a Roth and take advantage of the current tax rates. In fact, they may consider converting part of their IRA in 2011 and part in 2012 and effectively spread the tax burden over a two-year period at the current tax rates.”

So, single taxpayers can contribute the full amount ($5,000 or $6,000 if 50 or older) to a Roth IRA in 2011 if their MAGI is less than $107,000, while taxpayers filing jointly can contribute the full amount if their MAGI is less than $169,000. You get to make partial contributions to a Roth IRA if your MAGI is less than $122,000 for single taxpayers and or $179,000 for joint filers.

LEAVE YOUR IRA TO YOUR SPOUSE: The estate tax exclusion has been increased to $5 million per person, Slott wrote in his newsletter. What’s more, the exemption is now portable for married couples. “Any portion of a deceased spouse’s unused exemption may be used by the surviving spouse’s estate to reduce an estate tax obligation,” wrote Slott. Given that, he said, more IRA owners will want to leave their IRA assets to their spouse since it will be less likely to cause the estate to be subject to estate tax.

In addition, Roth IRAs become even more worthwhile given the new estate tax exclusion. “Married couples can now pass up to a $10 million Roth IRA to children completely income and federal estate tax free, even if the surviving spouse dies as the owner of all $10 million of the Roth account,” said Curfman.

Curfman used this example to illustrate the planning opportunity. “Say John dies in 2011,” Curfman said. “He leaves $1 million to his children and everything else to his wife, Martha. John made no taxable lifetime gifts. Therefore, John had $4 million of unused estate tax exclusion, which passes to Martha. If Martha then dies in 2012, her estate can exclude up to $9 million from federal estate tax using her own $5 million exclusion, plus the $4 million that John did not use. What this means is that individuals may want to name their spouse as a sole beneficiary of an IRA to allow future beneficiaries to stretch Required Minimum Distributions (RMDs) over a longer life expectancy instead of using a credit shelter trust as the IRA beneficiary.”

KEEP ON GIVING: Another tax law that could help older IRA owners and qualified charities is this. “Qualified charitable distributions have been reinstated through 2011,” Curfman said. “IRA owners and beneficiaries 70  1/2 or older can make distributions of up to $100,000 directly to charities. They will not receive a charitable deduction, but the distribution will not be added to adjusted gross income (AGI) and can be used to help satisfy Required Minimum Distributions.”

SAVE EVEN MORE: The employee portion of the Social Security (FICA) tax has been reduced from 6.2 percent to 4.2 percent for 2011 only, wrote Slott. For those earning $106,800 or more, this will amount to greater than $2,100 in extra tax savings,” he said. Pundits, by the way, have been suggesting that workers sending the savings into a retirement account, a 401(k) or IRA for instance.

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ABOUT THE WRITER:

Robert Powell is editor of Retirement Weekly, published by MarketWatch.