Columnists

A Quick Summary 2011 Changes

Issue 34.11

Vehicles: 
Medical/Moving .1

Business .51
Charity .14
Exemptions & Rates
1. Tax Rates 10%-35%.
2. Personal exemptions $3,650.
3. Itemized deductions allowed in full.
4. Capital Gains rates remain at 2010 rates; Dividends will remain taxed at Capital Gains rates.
5. Marriage penalty relief provisions extended.
6. AMT Exemption Amounts: Married Filing Jointly $74,450; Single or HOH $48,450.

7. Teacher Supplies $250.

Schedule Deductions
1. Sales Tax in lieu of State and Local Income Tax deduction is extended.

2. Conservation deduction rate 50% of AGI.
3. Direct trustee-to-trustee transfer from IRAs to a charity as a non-taxable, non-deductible amount which satisfies RMD requirements re-instated, limited to $100,000/ taxpayer/year for individuals over age 70 ½.
4. Mortgage Insurance/Qualified Mortgage Interest extended.
Depreciation
1. Bonus depreciation is mandatory/not limited by income. Bonus is available for nearly all new purchases in the applicable time period. Only related party purchases, retail, restaurant and foreign assets are excluded from bonus depreciation.

Note that this change also allows 100% bonus depreciation for heavy SUV’s and pickups with a GVW over 6,000 pounds.
2. Computer software eligible for Section 179.
3. Special 15 year depreciation life for leasehold improvements, retail & restaurant property.
Credits
1. $1,000 Child Tax Credit will continue, as will the refundable nature to the extent of 15% of earnings above $10,000.
2. The higher 2010 rates and phase-outs will continue.
3. Dependent Care Credit amounts of $3,000-one child and $6,000-more than one child.
4. Increased 2011 adoption credit amounts.
5. Residential Energy Efficient Home credit – extended. There is a maximum credit allowed and also some limits.
6. 30% alternative vehicle refueling property credit – extended.
Education

1. Deductible Student loan interest, allowed using higher AGI phase out amounts from 2010.
2. Tax Free Scholarships from: National Health Services Corp, and F. Edward Herbert Armed Forces Health Professions Program.
3. Tuition/Fees deduction – extended.
4. American Opportunity Credit – extended.
5. Coverdell Education Savings Account deposit limits of $2,000 annually per person.

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