Haefele Flanagan

 

 The Haefele Flanagan Newsletter

January 2012

  

Your 2011 Tax Filing: What You Should Know

 

 

- If you haven't heard already, the due date for filing your returns this year is April 17th. April 15th falls on a Sunday and Monday, April 16th, is a federal holiday.

 

- Beginning in 2011, brokerage firms are required to report to the IRS not only proceeds from sales of stocks and mutual funds, but also the cost basis of the investments that are sold. The IRS has designed a new Form 8949 for reporting capital gains and losses. A summary of the information listed on this form is carried over Schedule D. A couple of new columns are added to Form 8949 reporting - one for adjustments to basis (in case your broker has an incorrect figure) and one for coding the transaction to identify the type of sale.
 

- Business mileage rates for 2011 were changed mid-year, so when calculating your mileage for 2011 use the rate of 51 cents per mile for miles driven up to June 30, 2011 and 55 ½ cents per mile from July 1 to Dec. 31.

 

- The temporary payroll tax cut has been extended to Feb. 29; employees will enjoy a continued savings of 2% of wages withheld for Social Security - from 6.2% to 4.2%. The Social Security wage base for 2012 is $110,100 up from $106,800 in 2011. Once your wages exceed this amount, Social Security will not be withheld but Medicare will continue to be withheld.
 

- The self-employment health insurance deduction no longer offsets the self-employment tax. In 2010 only, self-employed workers were able to reduce the amount subject to self-employment tax on Schedule SE by the amounts paid for health insurance premiums. You can still take the deduction on Form 1040 as an adjustment to income.


- Foreign financial assets are reported on a new Form 8938. The foreign asset disclosure form is separate and different from the foreign bank account report. Taxpayers with foreign assets may need to file both documents.
 

- The first-time home buyer's credit is now only available to members of the military or Foreign Service. If you are repaying the first-time home buyer's credit, you may not need to complete and attach Form 5405.

 

If you have any questions or would like more information, please contact Fred Schutz at 856-722-5300 ext. 201 or Dave Gill at ext. 210.

 

 

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