Thursday, March 1, 2012

Before You File Your 1040, Read This…

Just in case you thought the tax code wasn’t long enough at some 73,608 pages (according to CCH Group) there were a few additions you need to know about before you file your 1040.
Most of you are aware that this year we have a couple of extra days to file, extending the due date to April 17. And we can all breathe a sigh of relief that Congress extended the 15% capital gains rates. Additionally, for those folks who inherited estates in 2011 that were valued at less than $5 million, you are home-free, as far as federal estate tax goes. But should your pockets be deeper, you will face a 35% tax wallop.

And there are a few other changes that may affect your pocketbook Tax Law Changes for 2011 Federal Tax Returns:
·       You’ll have to file a new piece of paper, Form 8949, for Sales and Other Dispositions of Capital Assets, i.e., your capital gains and losses.

·       If you didn’t report the taxable amount of monies you converted or rolled over an amount from a traditional IRA to a Roth IRA or designated Roth in 2010 on your 2010 return, you will need to report half of it on your 2011 return and the rest on your 2012 return.

·       Alternative motor vehicle credit, but only if you purchased—or put into service—the vehicle in 2011, and it is a new fuel cell motor vehicle. Credit may also be available for the cost of converting a vehicle to a qualified plug-in electric drive vehicle. Use Form 8910.

·       Standard mileage rates, which are 51 cents per mile for January 1 through June 30 and 55 ½ cents per mile for July 1 through December 31.

·       You’ll be happy to note that the Alternative minimum tax (AMT) exemption amount increased to $48,450 ($74,450 if married filing jointly or a qualifying widow or widower; $37,225 if married filing separately).

In these tough economic times, every dollar counts, so make sure you get all the deductions you have coming!

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