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What's
New 2011
Every year,
changes to the tax code and IRS inflation adjustments give taxpayers
new numbers to use in their tax planning. Here are the numbers you'll
need for 2011.
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Provision
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2011
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2010
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Standard mileage rate for business driving
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51¢ a mile
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50¢ a mile
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Mileage rate for medical and moving expense
deductions
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19¢ a mile
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16.5¢ a mile
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Mileage rate for charitable driving
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14¢ a mile
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14¢ a mile
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Adoption credit
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$13,360
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$13,170
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Maximum wages subject to social security tax
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$106,800
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$106,800
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Social security
earnings limit
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$14,160
$37,680
No limit
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$14,160
$37,680
No limit
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Top estate tax rate
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35%
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35%*
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Amount exempt from estate tax
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$5 million
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$5 million*
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Annual gift tax exclusion (per donee)
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$13,000
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$13,000
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Maximum retirement
plan contributions
IRA for those under age 50
IRA for those
50 and over
SIMPLE plan for
those under age 50
SIMPLE plan for
those 50 and over
401(k) plan
for those under age 50
401(k) plan for
those 50 and over
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$5,000
$6,000
$11,500
$14,000
$16,500
$22,000
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$5,000
$6,000
$11,500
$14,000
$16,500
$22,000
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"Kiddie tax" threshold
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$1,900
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$1,900
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"Nanny tax" threshold
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$1,700
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$1,700
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Personal exemption
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$3,700
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$3,650
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Standard deduction
Single
Joint returns
and surviving spouses
Married filing
separately
Head of
household
Additional
for elderly or blind (married)
Additional for
elderly or blind (single)
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$5,800
$11,600
$5,800
$8,500
$1,150
$1,450
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$5,700
$11,400
$5,700
$8,400
$1,100
$1,400
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*For
deaths occurring in 2010, estates have a choice between applying the
retroactively reinstated estate tax with a step-up in basis to fair
market value for estate property or no estate tax with a modified
carryover of the decedent's basis.
Tax
Reminders
Filing
deadlines. The
filing deadline for 2010 tax returns for individuals and partnerships
is April 18, 2011. The IRS extended the deadline because Washington,
D.C. observes the Emancipation Day holiday on April 15. The deadline
for calendar-year corporations to file 2010 returns is March 15,
2011.
Extension requests can be filed, giving individuals and
corporations an additional six months to file (but not to pay taxes
owed). Partnerships can request an additional five months to file.
Contribution
recordkeeping.
The IRS is a stickler when it comes to required recordkeeping for
charitable contributions. Here's what you need in order to deduct
your donations. Cash contributions under $250 require a bank record
such as a cancelled check, credit card record, or receipt from the
charity. For larger donations, a receipt from the charity must be
obtained before filing your return.
Restored
deductions. The
tax law passed in December restored for 2010 and 2011 deductions that
had expired at the end of 2009. Don't overlook those that apply to
you: the option to deduct state and local sales taxes in lieu of
state and local income taxes, the teacher's deduction for buying
classroom supplies, and the deduction for college tuition and fees.
Children's
filing requirements.
Your children may have to file a 2010 income tax return. Generally, a
return is required if the child had wages of more than $5,700,
self-employment earnings over $400, or investment income (such as
dividends, interest, and capital gains) over $950. If your child had
both earned and investment income, other thresholds apply. Also, if
your child is due a refund, a return must be filed to get it.
Medical
account rule changes.
If you've been buying over-the-counter medications with funds from
tax-favored medical savings accounts, be aware that doing so is no
longer allowed in 2011. Also be aware that the penalty has doubled to
20% for nonqualified withdrawals taken from health savings accounts
or Archer medical savings accounts.
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