Are you filing a 1040 with Schedule A? You may want to delay filing 'til Feb.

The 2010 Tax Relief Act passed later in the year had caught the IRS of guard and they need time to reprogram its computers for the new changes.  This does not apply to all taxpayers.  Some taxpayers planning to file their 2010 tax returns early have been advised by the IRS to wait until mid- to late-February, 2011.

Who are affected? Affected taxpayers are those planning to file Schedule A or claim above-the-line deductions for higher-education tuition and fees or educator expenses.

Hit Counter

When is the tax return due date?

Extended due date this year. Because of the Emancipation Day holiday in the District of Columbia, the due date of Form 1040 for 2010 is Apr. 18, 2011, instead of Apr. 15, 2011. The Apr. 18 due date applies even for taxpayers who do not live in the District of Columbia.

Hit Counter

Deduction allowed

Repairs to your personal residence incurred because of corrosive drywall can be deductible.  However, there is a catch as to when they were installed.   Source IRS.

Hit Counter

Payroll Deductions...

The 2010 Tax Relief Act reduces the employee OASDI tax rate under the FICA tax by two percentage points to 4.2%. The self-employment income is reduced by two percentage points to 10.4% percent.  Thus, you should see an increase in your paycheck and a reduction in your deductions in 2011.   The limit remains at $106,800.   Source IRS 

Hit Counter

Gift Card received during X-mass...is it reportable income or not?

A new revenue procedure allows a taxpayer to defer recognizing in gross income advance payments received from the sale of gift cards that are redeemable for goods or services of the taxpayer or a third party.   Excerts from the IRS.

Hit Counter

Reporting requirement- Recipients of Rental Income

Recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business. In particular, rental income recipients making payments of $600 or more during the tax year to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income are required to provide an information return (typically Form 1099-MISC) to IRS and to the service provider.

Source IRS




Hit Counter

Retainer workers credit- in 2011

Up-to-$1,000 credit for “retained workers” in 2011. For any tax year ending after Mar. 18, 2010, Sec. 102 of the Hiring Incentives to Restore Employment Act provides an up-to-$1,000 increase (retention credit) to the general business credit for “retained workers.”

Source IRS

Hit Counter

What's New for 2011

Brief Summary of Few:

• Medicare Part D coverage gap rebate is not taxable.
• Qualifying parking max deduction is $230/month-same amount for employer provided transit.
• 2010-Start-up cost can be deducted raised to $10, 000.
• Standard milage rate for business is 50 cents.

Source IRS

Hit Counter

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



Hit Counter

General Business Credits

Hit Counter

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