While you were Holiday shopping,
Congress was busy with tax law!
Congress passed and the President signed the Tax Relief / Job Creation Act of 2010 while all of us were completing those last minute holiday purchases.
The bill enacted a variety of provisions, some effective for 2010 and many effective for 2011 and beyond.
The bill extends certain individual tax provisions which had expired December 31, 2009 including:
- the deduction for state and local sales tax
- the higher education tuition deduction and
- the $250 above-the-line teacher's classroom expense deduction
The bill also provides an "Alternative Minimum Tax" patch for 2010 and 2011, allowing many taxpayers the opportunity to avoid paying AMT.
Below is a partial list of extensions of current law:
- 2010 Individual tax rates were extended thru 2012;
- 2010 rates on dividends and capital gains were extended thru 2012;
- There will be no phaseout of itemized deductions or personal exemptions;
- The $1,000 Child Tax Credit will continue;
- Enhancements were made to the Earned Income Tax Credit;
Deductions for student loan interest and mortgage insurance premiums were continued.
The Act reduces the employee-share of the OASDI portion of Social security tax from 6.2% to 4.2% for wages earned in 2011, up to the taxable wage base of $106,800. This reduction applies to all wage earners and self-employed individuals. Note that the employer share remains the same.
The Federal estate tax exemption was increased to $5 million with a maximum rate of 35% for 2011 and 2012.
Note that the IRS has warned that late action by Congress means that the IRS must reprogram their computers to reflect all of the changes made and they won't accept tax returns with Schedule A (that's the schedule with your itemized deductions for home mortgage interest, contributions, etc) until mid to late February 2011.
2011 Standard Mileage Rates Annnounced
The Internal Revenue Service announced that - beginning January 1 2011 - the following standard mileage rates will apply:
51 cents per mile for busines miles driven
19 cents per mile for medical or moving purposes and
14 cents per mile driven in service of charitable organizations.
California conforms to these rates
Are you a Landlord?
If so, beginning January 1, 2011, you must obtain the name, tax identificaiton number (or social security number), and address from all individuals and businesses that provide services to your property. Examples include gardeners, painters, property managers and maintenance people.
The recently-enacted Small Business Jobs Act of 2010 requires landlords to report payments of $600 or more to each service-provider during the year to the IRS on Form
1099-MISC starting with payments made in 2011.
IRS Form W-9 is the form to be used to obtain the required information from service-providers.
If You'd like an Appointment.......
If you want to set your appointment for preparation of your 2010 tax return, contact Gina in our office - this year,
Gary, Mike, Susan and Sonia will be accepting appointments to prepare your tax returns.
We have paper and electronic organizers available -
call Gina to order your organizers. We ask that you contact her directly so she can confirm your current mailing address and confirm your identify for security purposes.
Our short form, 1 page, organizers will be mailed the first week of the new year.
Have a Wonderful New Year!
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