2011 Federal Income Tax Changes

One financial challenge for accountants and taxpayers alike is keeping up with all the annual changes to federal income tax regulations. This year is no different-there were plenty of federal income tax changes in 2011. Here are some to keep in mind as you prepare to file your income taxes for the 2011 fiscal year:

-How's this for the most positive of the 2011 federal income tax changes? You have two extra days to procrastinate-err, work on your return-this year! April 15 is a Sunday this year and April 16 is a holiday (Emancipation Day) in Washington, D.C., so all returns must be postmarked by 11:59 p.m. Tuesday, April 17, 2012.

-Some of the 2011 federal income tax changes are multi-layered-such as the standard mileage rates. For mileage driven for business prior to July 1, 2011, the rate is 51 cents per mile. But that rate rises to 55 cents for miles driven after that. The mileage rate on vehicles used to obtain medical care also changed at the halfway point of 2011: From 19 cents per mile prior to July 1 to 23 cents per mile afterward.

-Federal income tax changes in 2011 include, in most cases, an increase in the income one receives before he or she has to file a federal return. Single taxpayers under the age of 65 need to file if their gross income is $9500 or more. People 65 years and older must file if their gross income is at least $10,950. A married couple consisting of two spouses both younger than 65 needs to file a joint return if its gross income is $19,000 or more. For a couple in which one spouse is 65 or older, the minimum gross income required to file is $20,150. For a couple in which both spouses are 65 or older, the minimum gross income is $21,300. Lastly, a married person who is filing separately must do so if his or her gross income is $3,700 or more.

-Most standard deductions have also increased for 2011 tax returns. For a single person or a married person filing separately from his or her spouse, the standard deduction has risen to $5,800. That number is doubled-$11,600-for a married couple that is filing a joint return. Someone who is filing as the head of household is entitled to an $8,500 standard deduction. In addition, federal income tax changes in 2011 include an increase in standard deductions for those who are legally blind and/or at least 65 years old by January 2, 2012.

-Even if the 2011 federal income tax changes allow you to not file a federal return, you should still provide a filing if you either made estimated federal tax payments during the year, had federal income tax withheld at some point or qualified for an additional child tax credit and/or the earned income credit.

These are just a few of the 2011 federal income tax changes. Make sure to meet with your accountant before filing your return this spring and go over all the 2011 federal income tax changes to see how they impact you.

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