Tax Return preparation can have a hiden cost...

Sometimes is better to hire a professional for some work; for example doing your tax return.  Go to the link and read some stories. 

http://www.toddtax.com/rscs_imgs/self_prep.pdf



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General Business Credits

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General business credits of eligible small businesses for 2010 carried back 5 years

 

The new law allows an eligible small business to carry back general business credits five years. Previously, the credits could only be carried back one year. The carryback is for credits determined in the first taxable year beginning after December 31, 2009.

An “eligible small business” in general is defined as follows:

• A corporation whose stock is not publicly traded, a partnership, or a sole proprietorship, and
• The taxpayer must have $50,000,000 or less in average annual gross receipts over the three preceding tax years.

Source IRS 

Adoption Credit

The Affordable Care Act raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can get it even if they owe no tax for that year. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply. In addition to filling out Form 8839, Qualified Adoption Expenses, eligible taxpayers must include with their 2010 tax returns one or more adoption-related

documents.  Source: IRS.gov

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Changes in Flexible Spending Arrangements starting on 1-1-2011

Effective Jan. 1, 2011, the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending Arrangements or health reimbursement arrangements unless a prescription is obtained. The changedoes not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles.

The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan. A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Employers and employees should take these changes into account as they make health benefit decisions for 2011.

Source: IRS.gov





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The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extends for two years the Bush-era tax cuts, other provisions:

• 100% first-year writeoffs of qualifying property placed in service after Sept. 8, 2010 and before Jan. 1, 2012, and
• A payroll/self-employment tax cut of two percentage points for 2011 for employees and self-employed individuals,
• Estate tax relief, and
• A two-year AMT “patch.” , and
• many other provisions..

Source IRS.

U.S.A. 2011 Key Budget Highlights

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• Extend for another year the broadest tax cut in American history – the Making Work Pay Tax Credit – for 110 million American families, including 8.4 million families in Texas.
• Increase the child care tax break by providing a 35 percent credit for middle-class families earning up to $85,000 a year and at least some additional credit to families earning up to $113,000. Families could claim up to $3,000 in expenses for one child or $6,000 for two children. Many middle-class families with two children will see value of the credit nearly double, from $1,200 to $2,100.
•  Expand child care funding for working parents by adding $1.6 billion to the Child Care Development Fund, the largest one-year increase in 20 years, to serve an additional 235,000 children. For Texas, the Budget includes $603.1 million in child care assistance.
• Deploy future TARPfunds to assist homeowners threatened with foreclosure and small businesses needing access to affordable credit.

Source US Govt.- Dept. Treasury

Next year's economy: Good enough may be as good as it gets | McClatchy

Next year's economy: Good enough may be as good as it gets McClatchy

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Federal tax Deposits

Effective January 1, 2011, all federal tax deposits (FTDs) must be made by electronic funds transfer (EFT).  So, paper coupons may no longer be used to submit federal depository taxes, such as employment taxes.

Source IRS

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Report foreign bank account to the IRS

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If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund or other type of financial account, you may be required to report the account yearly to the Department of the Treasury. Source IRS