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Tax law changes for 2011 : (For Quick Look Click here) |
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Long-Term Capital Gains and Qualifying Dividends
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For taxpayers in the 10% or 15% bracket--0%
For taxpayers in higher brackets -- 15%
Tax on unrecaptured Sec. 1250 gain -- 25%
Capital gain rate on collectibles -- 28%
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Standard Deduction : |
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Standard Deduction |
| Married filing joint and surviving spouses |
$11,600 |
| Heads of Household |
8,500 |
| Single individuals |
5,800 |
| Married, filing separate |
5,800 |
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Additional standard deduction for aged and blind--$1,150 each ($1,450 if individual is unmarried and not surviving spouse) |
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Personal Exemption |
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Amount--$3,700 for 2011 |
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Savings Bond/Higher Education Expense Exclusion |
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Modified adjusted gross income phaseout--married, joint, $106,500--$136,650; all other filing status, $71,100--$86,100 |
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American Opportunity Tax Credit (Hope Credit) |
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100% of first $2,000 of education expenses; 25% of expenses between $2,000 and $4,000 (maximum credit $2,500)
Phaseout begins at modified adjusted gross income of $160,000 joint return; $80,000 all others.
Credit completely phased out at $180,000 ($90,000).
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Lifetime Learning Credits |
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20% of first $10,000 of qualified education expenses.
Phaseout begins at modified adjusted gross income of $102,000 joint return; $51,000 all others.
Credit completely phased out at $122,000 joint returns; $61,000 all others.
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Tuition and Fees Deduction |
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$4,000 limit of qualifed expenses.
AGI not in excess of $130,000 (married joint) or $65,000 (all others) maximum deduction is $4,000.
AGI not in excess of $160,000 (married joint) or $80,000 (all others) maximum deduction is $2,000.
No deduction if AGI in excess of $160,000 (married joint) or $80,000 (all others)
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Interest on Education Loans |
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Maximum interest deduction--$2,500
Modified adjusted gross income phaseout range--Married, joint, $120,000--$150,000; all other filing status, $60,000--$75,000
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Miscellaneous |
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Child Tax Credit--$1,000; phaseout MAGI $110,000 joint, $75,000 single, $55,000 MFS; refundable $3,000 Sec. 24(d)(1)(B)(i)
Annual Exclusion for Gifts--$13,000
Unearned Income of Minor Child (Kiddie Tax)--$950 ($9,500 for parental election)
Foreign Earned Income Exclusion--$92,900
Minor Child subject to Kiddie Tax--up to age 18 or full-time student over 18 with earned income no more than 1/2 support under age 24.
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New Foreign Asset Reporting on Form 8938 |
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From 2011 onwards US citizens, Green card holders and Resident Aliens are required to report ownership of specified foreign financial Assets on form 8938 to the extent the total value of those assets exceeds certain thresholds .This form needs to be filed along with the tax return. Failure to do so can lead to substantial penalties. Form 8938 does not replace form TD F 90 22.1 (FBAR reporting).
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Quick Look: |
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Here's a quick review of some of the tax changes you'll see from 2010 to 2011 as a result of inflation adjustments and tax law changes. |
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Provision |
2010 |
2011 |
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Mileage rate for medical |
16.5¢ per mile |
19¢ per mile |
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Maximum wages subject to social security tax |
$106,800 |
$106,800 |
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Social security earnings limit |
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- Below full retirement age |
$14,160 |
$14,160 |
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- Full retirement age |
No limit |
No limit |
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- In the year you reach full retirement age |
$37,680 |
$37,680 |
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Annual gift tax exclusion (per donee) |
$13,000 |
$13,000 |
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Maximum retirement plan contributions |
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- IRA for those under age 50 |
$5,000 |
$5,000 |
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- IRA for those 50 and over |
$6,000 |
$6,000 |
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- SIMPLE plan for those under age 50 |
$11,500 |
$11,500 |
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- SIMPLE plan for those 50 and over |
$14,000 |
$14,000 |
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- 401(k) plan for those under age 50 |
$16,500 |
$16,500 |
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- 401(k) plan for those 50 and over |
$22,000 |
$22,000 |
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"Kiddie tax" threshold (unearned income) |
$1,900 |
$1,900 |
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"Nanny tax" threshold |
$1,700 |
$1,700 |
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Personal exemption |
$3,650 |
$3,700 |
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Standard deduction |
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- Single |
$5,700 |
$5,800 |
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- Joint returns & surviving spouses |
$11,400 |
$11,600 |
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- Married filing separately |
$5,700 |
$5,800 |
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- Head of household |
$8,400 |
$8,500 |
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- Additional for elderly or blind (married) |
$1,100 |
$1,150 |
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- Additional for elderly or blind (single) |
$1,400 |
$1,450 |
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