What’s New---What Stays the Same---What is Coming | Tax Tip of the Week | No. 124

2011 - and Beyond - Tax Law Changes

As another year comes to an end and the upcoming tax filing season looms before us, we wanted to send you this short list of the ever-changing tax laws.  This is only a partial summary of what to expect this year.  Please call us if you have any questions.What’s New in 2011- Nominal increases on personal exemptions and standard deductions- Exemptions still not subject to AGI phase out- Still have 0% or 15% tax on long-term capital gains and qualified dividends - through 2012- Standard mileage rates for auto business use- split year again- $0.51/mile 1/01/11 – 6/30/11- $0.55.5/mile 07/01/11 – 12/31/11- Don’t forget medical and charitable mileage deductions- New Form 8867 "Due Diligence" form for EIC claims (need to attach this year)- Home Energy Credits are a maximum of $500 for 2011 (must reduce credit by amounts claimed in 2006 - 2010)- 2% reduction of the social security tax portion of SE tax- Estate Exclusion up to $5 million with a 35% tax rate- One set of rules this year!- Back to $1 million exclusion and 55% tax rate in 2013?- New Schedule D and Form 8949- Report proceeds and basis on Form 8949 which flows to Sch D- Must indicate on Form 8949 whether basis is shown on 1099-B, not shown on 1099-B, or no 1099-B was issued- Audit Alert!What Was  Extended for 2011- Choose either sales tax deduction or state/local deductions on Sch A- Lost the option to include additional sales tax paid on new cars and large purchases- PMI deduction- expires in 2011- $250 above-the-line Educator deduction- Tax-free charitable distributions on IRA RMDs-expires in 2011- No AGI phase out on Sch A deductions- AMT “Patch”- expires in 2011- Self-employed can use Medicare premiums for SE health insurance deduction - Amend 2008 & 2009?- Refundable Adoption Credit-expires in 2011- Gift Exclusion still at $13,000What We Lost for 2011- No “Expanded” 1099-MISC reportingNote: Sch E instructions are not updated- New Form 1099-K—but no reporting of credit card income on 2011 business tax forms- First-time Home Buyer Credit- COBRA subsidy for the unemployed- Making Work Pay Credit- Self-employed health insurance reduction on SE taxesWhat is Coming in 2013- Increased Medicare premiums for AGI over $250K married/$200K single filers- A new 3.8% Medicare tax on investment income-If AGI over $250K married/$200K single filers- The AGI floor to deduct medical expenses increases to 10%- Will remain at 7.5% for those 65 and older- Marriage penalty returns- AGI Phase-outs returnWe are just a phone call away if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTWTax Tip of the Week Video Series:http://youtu.be/6MRNlbVuLwU...until next week.