Tax		Forms

2011 Tax Law Changes

Many of the changes to the tax code in 2011 can be traced to the sweeping tax cuts approved by Congress back in 2002. However, some changes were directly impacted by the dramatic rise in energy costs, as well as the economic downturn.

Below is a summary of the major 2011 tax law changes:

Filing Date Moves to April 17th For most people, the words "April 15" are synonymous with the tax filing deadline. However, taxpayers filing their 2011 tax forms will get actually get two extra days to file. Why? Because April 15, 2012 falls on a Sunday, and all residents of Washington, D.C., will officially celebrate Emancipation Day on April 16, 2012.. Emancipation Day usually falls on April 16th. On that day in 1862, President Abraham Lincoln signed into law the release of roughly 3,100 enslaved persons in the District of Columbia. And while it has been celebrated frequently since 1866, Emancipation Day was made an official holiday in the District of Columbia in 2005. Because much of the District of Columbia wll be shuttered on April 16th, the tax deadline gets pushed back to the next business day: Tuesday, April 17th. While residents of the District of Columbia get to celebrate Lincoln's deed, the entire nation gets a little extra time to file their 2011 taxes. And if you need even more time, Form 4868 can help.

Mileage Rates Boosted As energy costs have fluctuated wildly over the past couple of years, the IRS has adjusted mileage rates in the middle of the year to reflect those increased costs. For miles driven for business use between January 1st and June 30, 2011, the IRS provided a standard mileage rate of 51 cents per mile, an increase of a penny per mile over the previous year. For any miles driven for business use between July 1, 2011 and December 31, 2011, the IRS permitted a standard mileage rate of 55.5 cents per mile. Taxpayers who used their vehicles to get medical care during the year saw a similar split. If you used your car to get medical care or to move before June 30, 2011, you are able to deduct 19 cents per mile, a decrease of almost 3 cents per mile. Miles driven between July 1, 2011 and December 31, 2011 saw their deduction jump to 23.5 cents per mile. For the first time, taxpayers were also able to use the business standard mileage rate for a vehicle used for hire, such as a limousine or taxicab. It's important to keep proper documentation to support your deductions. Ensure that you record begin and end odometer readings, the date that you made the travel, and the specific reason for claiming the mileage rate deduction. Common financial software like Quicken, QuickBooks, and Mint can help keep track of these. The IRS has already announced mileage rates for 2012. Beginning January 1, 2012, the standard mileage rate will remain at 55.5 cents per mile for business miles driven. Also, miles driven for medical or moving purposes will drop slightly to 23 cents per mile. The charitable mileage deduction will remain unchanged at 14 cents per mile.

Alternative Minimum Tax Updated The AMT exemption amount for individuals has increased to $48,450. If married filing joining or a qualifying widow or widower, the AMT exemption rises to $74,450. If married but filing separately, that amount rises to $37,225. The AMT exemption amount for children has also increased. Kids whose unearned income is taxed at their parent's tax bracket will receive an AMT exemption of $6,800. For more information, download Form 6251.

Standard Deductions for 2011 Tax Returns For most people who don't itemize deductions, the basic standard deduction remained relatively unchanged in 2010. However, there was a slight change for heads of households. In 2010, the standard deductions are: $8,500 for head of household (up from $8,400 in 2010) $11,600 for Married taxpayers filing jointly and qualifying widows or widowers (up from $11,400 in 2010) $5,800 for married taxpayers filing separately (up from $5,700 in 2010) $5,800 for single taxpayers (up from $5,700 in 2010) Taxpayers are not able to claim the standard deduction if someone else can claim you as a dependant on their tax return.

All information is believed accurate at time of transmission, and no tax advice is implied. Always consult your tax professional if you have questions.

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