Prepare for Tax Year

·        No charitable IRA donation: expired 12/31/2011.  IRA owners age 70 ½ or older were able to donate up to $100,000 of assets per year to a tax-exempt charity.
·        No AMT patch: An inflation adjustment for the AMT has expired…So taxpayers making quarterly estimated payments must choose between paying higher amounts they may never owe and risking underpayment penalties if there isn’t a fix.
·        Transportation tax benefits: For 2012, employees may set aside only $125 a month in pretax dollars to pay for transit and commuter bus benefits, down from $230 last year.
·        Inflation adjustments for 2012: The top 35% income-tax rate, both for joint and single filers = $388,350, up from $379,150.  Max contribution to 401(K) & 403(B) is $17,000, up from $16,500.  SS tax cap rises to $110,100 from $106,800 last year.

·        New for 2011 Returns:

o   April 17 is due date for filing tax returns.

o   The cost basis of stock shares bought in 2011 will not be reported to the IRS.  Only when the shares are sold.

o   Foreign bank account:  If you have one you must fill out a new form for the IRS.  Due June 30^th.

o   BIG CHANGE on Schedule C:  LOOK AT THIS: “Did you make any payments in 2011 that would require you to file form(s) 1099?”  AND “If ‘YES,’ did you or will you file all required forms 1099?”

All my information came from the WSJ January 7th - 8th