Changes with Income Tax Credits and Deductibles to be Aware of

Tax Season is that time of year that you're either jumping for joy at the Income tax refund you receive, or you're on the other end, cursing at the amount you have to pay in. Regardless of which position you take on this subject, there are some important changes that have taken place with the IRS when it comes to filing your taxes. Whether you receive or pay in, you should probably have a look at what they are. It could very well make a difference in the amount you are paid from the IRS, or the amount that you don't have to pay the IRS.

• Due Date for filing is now April 18th instead of 15th. That's right, Due to the Emancipation Day Holiday in the District of Columbia, even if you don't live in the D of C, the due date to have your taxes filed is April 18th, 2011.
• The Limits on Personal Exemptions and Overall Itemized Deductions have ended. This includes a long list including retiree deductibles, education, payments on small business, disaster relief, IRA's, and on and on. However,at the time this particular publication I found this information on went to print, Congress was considering legislation that would reinstate many of these expired tax benefits. To find out if this legislation was enacted, and for more details, go to www.irs.gov/formspubs. So be sure and check that out.
• Changes with Self Employment Health Insurance Deductions (these became effective as of March 2010) States that if you were self employed and paid for health insurance, you may be able to include in your SEHI Deductible, any premiums you paid to cover your child who was younger than 27 at the end of 2010, even if the child was not your dependent.
• Increase in Standard Deductions: For some people who don't itemize their deductions, there is an increase in their Standard Deduction, depending on filing status. In addition the 2010 Standard Deductibles is also increased by

• #1 any state or local sales or excise taxes you paid in 2010 on a new vehicle after February 16, 2009 and before January 1st, 2010.
• #2 any natural disaster loss you had in 2010 because of a disaster that was declared a feral disaster after 2007 and that occurred before 2010.
  

• Adoption Credit is now Refundable meaning "In 2010 and 2011, you may be able to take a refundable tax credit for qualifying expenses paid to adopt an eligible child" (from irs.gov) read more about this here.
• Changes with First Time Home Buyers Credit and Repayment of First Time Home buyers Credit
• Changes with IRA's including Increased Modified AGI limit for traditional IRA contributions.
• Change in Standard Mileage Rates: If you own or lease a vehicle than you could qualify : Mileage for business usage is now .50 cents/mile, Medical reasons is 0.16 and 1/2 cents/mile, and Moving expense reasons is also 0.16 and 1/2 cents per mile.
• Corrosive Drywall induced home and home appliance damage.
• Changes in Personal Casualty and Theft Loss Limit
• With Divorced or Separated parents, if a custodial parent has revoked the release of a claim to child exemption, a Copy of the Revocation must now be included with His/Her return.
• Mailing In Your Return? IRS has changed the filing location for many areas, so you may be sending your Tax Return to a different address than before. Be sure and check.
• E-File now mandatory for some Paid Tax Preparer. If this applies to your tax preparer, they should make you aware during your visit and also let you know your options.

These are only some of the Changes made by IRS. To see all changes, or specific changes you may be looking for be sure to visit www.irs.gov for updated changes.

Here are some things to remember that are often overlooked, forgotten, or falsely entered intentionally,  when filing one's income tax return.  These are all very important and cause much trouble if left out or entered falsely. Believe it or not, the first one is at the top of IRS's list of things either forgotten, or entered wrong on year after year...

• Enter your social security number at the top of your form, and any other designated place.
• Secure your tax records from identity theft
• Free Electronic Filing is available at irs.gov
• Change of address - always report to IRS
• All taxpayer's ID numbers for whom you are claiming tax benefits....usually social security numbers.
• Any foreign sources of income you may receive, must be reported.
  
• Automatic 6 month extension (Form 4868)
• Always enter your phone number.
• Refund on late filed payment.
• Do not enter Frivolous tax submissions.
• Do not file erroneous claims for refund or credit.
  

Here's a list of things you need to take with you when going to file your taxes:

• Interest and dividend statements from banks (Forms 1099)
•  Valid Social Security cards for the taxpayer, spouse and dependents
•  Birth dates for primary, secondary and dependents on the tax return
•  Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
•  Photo identification
•  Total paid for day care
•  Day care provider's identifying number
•  A copy of last year’s federal and state returns, if available
•  Bank routing numbers and account numbers for direct deposit
• Other relevant information about income and expenses

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