Lower Tax Rates Extended. The 2010 Tax Relief Act extends through the end of 2012 the tax rates in effect in 2010. They had been scheduled to increase to the higher tax rates that were in effect prior to 2001.
Estate Tax. For individuals dying after 2010, the federal estate tax continues with a $5 million exemption and a 35 percent maximum rate. The current federal estate tax rules are scheduled to end after 2012.
Lower Capital Gains and Dividend Tax Rates Extended Through 2012. The tax rate reductions for long-term capital gains remain in effect for 2011 and 2012.
Child Tax Credit The credit of $1,000 per eligible child continues through 2012. The credit was extended by two years by the 2010 Tax Relief Act.
Payroll Tax Credit Starting in 2011, the partial credit for payroll taxes paid by employers is no longer available.
Section 179 Expense Deduction The $500,000 maximum amount of equipment placed in service that businesses can expense and the annual investment limit of $2,000,000 remain in effect for 2011.
Tax Credit for College Tuition The American Opportunity Tax Credit remains in effect through 2012.
Earned Income Tax Credit (EITC) Temporary increases in the Earned Income Tax Credit for filers with three or more children and the higher income levels for the phaseout of the credit have been extended through the end of 2012.
Mortgage Insurance Premiums. The special itemized deduction for mortgage insurance premiums paid on mortgages taken out after 2006 expires on Dec. 31, 2010.
Due date of return. File Form 1040, 1040A, or 1040EZ by April 17, 2012. The due date is April 17, instead of April 15, because April 15 is a Sunday and April 16 is the Emancipation Day holiday in the District of Columbia.
Reporting capital gains and losses on new Form 8949. In most cases, you must report your capital gains and losses on new Form 8949. Then you report certain totals from that form on Schedule D.
Standard mileage rates. The 2011 rate for business use of your car is 51 cents a mile for miles driven before July 1, 2011, and 55 1/2 cents a mile for miles driven after June 30, 2011. See chapter 26. The 2011 rate for use of your car to get medical care is 19 cents a mile for miles driven before July 1, 2011, and 23 1/2 cents a mile for miles driven after June 30, 2011. The 2011 rate for use of your car to move is 19 cents a mile for miles driven before July 1, 2011, cents a mile for miles and 23 ½ driven after June 30, 2011.
Standard deduction increased. The standard deduction for some taxpayers who do not itemize their deductions on Schedule A (Form 1040) is higher for 2011 than it was for 2010. The amount depends on your filing status.
Exemption amount. The amount you can deduct for each exemption has increased. It was $3,650 for 2010. It is $3,700 for 2011.
Self-employed health insurance deduction. This deduction is no longer allowed on Schedule SE still take it on Form 1040, line 29.
Health savings accounts (HSAs) and Archer MSAs. For distributions after 2010, the additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses has increased to 20%. Also beginning in 2011, amounts paid for medicine or a drug are qualified medical expenses only if the medicine or drug is a prescribed drug or is insulin.
Roth IRAs. If you converted or rolled over an amount to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, you generally must re-port half of it on your 2011 return and the rest on your 2012 return.
Designated Roth accounts. If you rolled over an amount from a 401(k) or 403(b) plan to a designated Roth account in 2010 and did not elect to report the taxable amount on your 2010 return, you generally must report half of it on your 2011 return and the rest on your 2012 return.
Alternative motor vehicle credit. You cannot claim the alternative motor vehicle credit for a vehicle you bought in 2011, unless the vehicle is a new fuel cell motor vehicle.
First-time homebuyer credit. To claim the first-time homebuyer credit for 2011, you (or your spouse if married) must have been a member of the uniformed services or Foreign Service or an employee of the intelligence community on qualified official extended duty outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010.
Repayment of first-time homebuyer credit. If you have to repay the credit, you may be able to do so without attaching Form 5405.
Nonbusiness energy property credit. This credit is figured differently for 2011 than it was for 2010.
Health coverage tax credit. This credit has been extended, and the amount has changed.
Foreign financial assets. If you had foreign financial assets in 2011, you may have to file new Form 8938 with your return.
Schedule L. Schedule L is no longer in use. You do not need it to figure your 2011 standard deduction.
Making work pay credit. The making work pay credit has expired. You cannot claim it on your 2011 return. Schedule M is no longer used.
Mailing your return. If you are filing a paper return, you may be mailing it to a different address this year because the IRS has changed the filing location for several areas.