The New Year Could Bring Tax Changes Affecting You
It’s tax time again. Every year there are changes that affect almost all taxpayers. Understanding these changes could save you headaches and money. Some of the updates may impact your 2010 return, while others will apply to the return you send next year.
- Wait to file. The IRS has requested you wait to file your 2010 return until at least the middle of February if you plan to itemize your deductions. The IRS needs to reprogram systems to handle the 2010 Tax Relief Act changes.
- Tax deadline extended. Taxpayers will have until Monday, April 18, to file their 2010 returns. The original deadline fell on Emancipation Day, and tax codes prohibit filing deadlines from falling on a Saturday, Sunday or holiday.
- Increase in your paycheck. In 2011, the Social Security tax withholding rate decreased from 6.2 percent to 4.2 percent. This will give you a little extra money for saving or investing.
- New standard deduction. The new standard deduction for married couples who file jointly is now $11,600. Singles and married couples filing separately will also see an increase to $5,800.
- Individual and dependant. The exemption for personal and dependants went up for most taxpayers to $3,700.
- Theft and loss. Starting in 2011, taxpayers will be able to claim theft losses and personal casualties of more than $100.
- Mileage deductions. For 2011, the IRS established deductible mileage amounts of 51 cents per mile for all business miles driven, 19 cents per mile for miles driven to receive medical care and 14 cents per mile for charitable purposes.
These are a few of the recent published changes. For more information visit www.IRS.gov or consult a tax professional.