Category: Tax Year 2012 and Prior
Ten Important Changes for Taxpayers for filing year 2011
Here are a few tax law changes you may want to note before filing your 2011 federal tax return:
1. Expired Tax Benefits
The following tax benefits expired in the 2011 tax year:
- The Making Work Pay Credit- Schedule M is no longer in use
- The Alternative Motor Vehicle Credit for a vehicle you bought after 2010 is no longer available unless the vehicle is a new fuel cell motor vehicle (please review Form 8910 for more information)
2. Alternative Minimum Tax (AMT) Exemption Amount Increased
The 2011 AMT exemption increased. The amount has increased to $48,450 ($74,450 if married filing jointly or a qualifying widow(er); $36,225 if married filing separately).
3. 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 for 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.
4. Repayment of First-Time Homebuyer Credit
If you have to repay the credit, you may be able to do so without attaching Form 5405. Please review the Form 5405 Instructions.
5. Standard Mileage Rates Adjusted for 2011
The standard mileage rates for business use of a vehicle:
- 51 cents per mile from January 1, 2011 to June 30, 2011
- 55 cents per mile after July 1, 2011 to December 31, 2011
The standard mileage rates for the cost of operating a vehicle for medical reasons or a deductible move:
- 19 cents per mile from January 1, 2011 to June 30, 2011
- 23.5 cents per mile after July 1, 2011 to December 31, 2011
In addition, beginning 2011, you may use the business standard mileage rate for a vehicle used for hire, such as a taxicab.
6. Roth IRAs
If you converted or rolled over an amount to a Roth IRA in 2010 and did not elect to report the taxable on your 2010 return, you generally must report half of it on your 2011 return and the rest on your 2012 return. Report the amount that is taxable on your 2011 return on line 15b (for conversions from IRAs) or 16b (for rollovers from qualified retirement plans, other than from a designated Roth account).
7. 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 of it on your 2011 return and the rest on our 2012 return.
8. Health Savings Accounts (HSAs) and Archer MSAs
The additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses has increased to 20% for distributions after 2010. Please review Form 8889 and Form 8853 for more information.
9. Schedule L
Schedule L is no longer in use. You do not need it to figure out your 2011 standard deduction.
10. Capital Gains and Losses
In most cases, you must report your capital gains and losses on new Form 8949 and report the totals on Schedule D. If you sold a covered security in 2011, your broker will send you a Form 1099-B (or a substitute statement) that shows your basis. This will help you complete Form 8949. Generally, a covered security is a security acquired after 2010.