FEW CHANGES IN TAX LAWS THIS YEAR
Next to the political gridlock in Washington, there are very few changes to this year’s tax laws. Of course, the tax code is still pretty complex.
“Although, congress keeps talking about simplicity, they have really done very little to simplify the tax systems” says Mark Luscombe, a Federal Tax Analysis at CCH.
“So every year, it gets a little more complex.”
Here is one simple way of looking at it, every year CCH puts out a standard Federal Tax Publication. In 1913 it was 400 pages long. Today it is 73, 608 pages.
Here are some of the changes for this year:
Everybody knows tax day is April 15, 2012, but this year it falls on a Sunday, and April 16, 2012, is a holiday in the District of Columbia. The deadline is actually April 17, 2012. Also, April 17, 2012, is also the deadline for making contributions to your 2011 Individual Retirement Account. Keep in mind you can take an extension for filing a tax return up until Monday, October 15, 2012, by filing form 4868. The form is on the IRS website, which is at www.irs.gov. Keep in mind the extension is merely an extension to file the return. It does not give you additional time to pay what you owe.
Taxpayers can take the standard deductions or they can itemize deductions on schedule A. For 2011, the basic standard deduction amount is $11,600.00 for married couples filing jointly. For most singles or for a married person filing separately, it is $5,800.00.
Teachers, Counselors, Principals, or School Aides who work at least 900.00 hours, during a school year, in a school that provides elementary or secondary education can deduct up to $250.00 of school supplies that they have purchased out of their own pocket. They are eligible for this deduction, even if they take the standard deduction.
Taxpayers, who take deductions for business use of a vehicle, can deduct actual cost or use the IRS standard mileage rate. For 2011, there are two different IRS rates. It is 51 cents a mile for the first 6 months and 55.5 cents per mile for the second 6 months. Why the difference? The IRS changed the rate to reflect the higher cost of gasoline.
You can also deduct your mileage from moving expenses. It was 19 cents a mile for the first half of the year, and 23.5 cents a mile for the 2nd half.