1 / 70

WHAT'S NEW IN 2011?

WHAT'S NEW IN 2011?. What we are going to cover: 2010 Tax Relief Act - New tax provisions in 2011 Items affecting tax preparation in 2011 and beyond Training and Certification. TAX RATES CONTINUED*. The 2010 Tax Relief Act: Extends all individual rates at 10, 15, 25, 28, 33 and 35 percent

miles
Download Presentation

WHAT'S NEW IN 2011?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WHAT'S NEW IN 2011? What we are going to cover: 2010 Tax Relief Act - New tax provisions in 2011 Items affecting tax preparation in 2011 and beyond Training and Certification

  2. TAX RATES CONTINUED* • The 2010 Tax Relief Act: • Extends all individual rates at 10, 15, 25, 28, 33 and 35 percent • Continues for two years – through December 31, 2012 * Affects 2011 and 2012 tax returns

  3. PAYROLL TAX CUT The 2010 Tax Relief Act reduces the employee-share of Social Security taxes from 6.2% percent to 4.2% The change is for wages earned in calendar year 2011 up to the taxable wage base of $106,800 Self-employed individuals will pay 10.4% (down from 12.4%)on self-employment income up to the threshold

  4. QUALIFIED CAPITAL GAINS AND DIVIDENDS* Qualified capital gains and dividends currently are taxed at a maximum rate of 15 percent (zero percent for taxpayers in the 10 and 15 percent income tax brackets) The 2010 Tax Relief Act continues for two years – until December 31, 2012 * Affects 2011 and 2012 tax returns

  5. Schedule D and Form 8949 • Schedule D for 2011 – has new reporting lines using Form 8949 (New in 2011) • Form 8949 has three boxes that need to be completed for each taxpayer • Box A – Cost basis shown on 1099-B • Box B – Cost basis not shown on 1099-B • Box C – No 1099-B received

  6. SCH D & FORM 8949, cont’d For each asset sold, the 1099 will have an A/B/C designator Assets can no longer be entered on Schedule D All assets information goes on Forms 8949 Page 1 is for short term; Page 2 is for long term

  7. SCH D & FORM 8949, cont’dTab 2 In TaxWise, Capital Gain or Loss Transactions Worksheet (Cap Gain Wkt) will load 8949s and put assets on appropriate pages Long Term/Short Term Capital Gains/Losses Wkts will no longer be in Forms list A/B/C designators will be located on Cap Gain Wkt under 1099 column Column (b) is code for adjustments to gain/loss, wash sales, exclusion of gain on main home, etc Column (g) is the amount of the adjustment

  8. SCH D & FORM 8949, cont’d • Column (b) is for gain/loss adjustment codes; see F1 help and Form 8949 instructions • Column (g) is for amount of adjustment

  9. A F D B C M

  10. CAPITAL GAINS ENTRY - 2011 TAXWISE

  11. Capital Gains Transactions – 2011

  12. 1040 – Page 1

  13. Standard Deduction/Exemptions • Standard deduction • MFJ - $11,600 (up $200) • Head of Household and $8,500 (up $100) • Single/MFS - $5,800 (up $100) • Personal/Dependency Exemption • $3,700 (up $50)

  14. CHILD TAX CREDIT The 2010 Tax Relief Act extends the $1,000 child tax credit for two years, through December 31, 2012. The qualifying child must be under age 17 at the close of the year and satisfy relationship, residency, support, citizenship, and dependent tests.

  15. EITC AND DEPENDENT CARE • Extends the enhanced EITC for two years (i.e., three or more qualifying children) • Extends the enhanced dependent care credit and eligible expenses for two years • From $2,400 to $3,000 and $4,800 to $6,000 for more than one qualifying individual • Maximum credit from 30% to 35 % of qualifying expenses

  16. EITC • Earned Income and adjusted gross income (AGI) must each be less than: • $43,998 ($49,078 married filing jointly) with three or more qualifying children • $40,964 ($46,044 married filing jointly) with two qualifying children • $36,052 ($41,132 married filing jointly) with one qualifying child • $13,660 ($18,740 married filing jointly) with no qualifying children

  17. EITC (continued) • Tax Year 2011 maximum credit: • $5,751 - three or more qualifying children • $5,112 - two qualifying children • $3,094 - one qualifying child • $464 - no qualifying children • Investment income must be $3,150 or less for the year. • Advance EITC no longer exists.

  18. AMT PATCH* • The 2010 Tax Relief Act increases the exemption amounts for 2010 and 2011: • $47,450 for individual taxpayers • $72,450 for married taxpayers filing jointly and surviving spouses • $36,225 for married couples filing separately. * Affects 2011 and 2012 tax returns

  19. Standard Mileage Rates • Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: • 51 cents/mile for business miles (55.5 cents effective 07/01/2011) • 19 cents/ mile driven for medical or moving purposes • 14 cents per mile driven in service of charitable organizations

  20. LTC Premiums deduction • For 2011, the maximum amount of qualified long-term care premiums includible as medical expenses has increased on Schedule A (Form 1040) Itemized Deductions (per person) • $340 - Age 40 or under • $640 - Age 41 to 50 • $1,270 - Age 51 to 60 • $3,390 - Age 61 to 70 • $4,240 - Age 71 and over

  21. EXTENDERS Qualified Charitable Distributions from certain individual retirement plans for charitable purposes (thru 2011) Deduction for educator expenses in figuring AGI (thru 2011) Tuition and fees deduction in figuring AGI (thru 2011) Itemized deduction for state and local general sales taxes (thru 2011)

  22. EXTENDERS(continued) American Oppor Tax Credit (thru 2012) Child tax credit of $1,000 and the earned income threshold of $3,000 for the child tax credit (thru 2012) Private mortgage insurance deduction (through 2011) Non-business energy property credit (with some limitations) (thru 2011) EITC increased credit for three or more qualifying children (thru 2012)

  23. Non-business Energy Property Credit This credit has been extended for 1 year with a reduced rate of 10%. Amounts provided by subsidized federal, state, or local energy financing do not qualify for the credit. The energy-efficiency standards for qualified natural gas, propane, or oil furnaces, or hot water boilers have been increased.  

  24. Non-business Energy Property Credit (continued) • For 2011, the credit is limited as follows. • Total combined credit limit of $500 for all tax years after 2005 (Form 5695, Part I). • Combined credit limit of $200 for windows for all the amount of your tax years after 2005. • Maximum credit for residential energy property costs: • $50 for any advanced main air circulating fan; • $150 for any qualified natural gas, propane, or oil furnace, or hot water boiler; • $300 for any item of energy-efficient building property.

  25. Residential Energy Credits

  26. IRS CHANGESFOR VITA-TCE • Lump-sum social security payments are included as Basic competency • Last year, only current year taxability in scope, but use of numbers from previous year returns in scope this year • No second copy of Form 8879 and income attachments, i.e. W2s’, 1099s’, etc retained at the site or by the ERO • SPEC no longer requires copy for storage; taxpayer still signs single copy prior to efile submission and retains the copy with their tax records

  27. NEW PREPARER USE FORM • Dedicated to Preparer’s Use Fields • Prep Use Fields no longer on Main Info Sheet • Prep Use Fields increase from 15 to 25 • Standardized to 15-character alphanumeric • Enter up to 25 questions in column A

  28. PREPARER USE FORM, cont’d • All Preparer Use Field entries will be stored for reporting purposes (not the question) • Accessible via the report server • Taxpayer Reminder Field will be added • Enter information you need to convey to preparer for following year • Will automatically display when return is started in TY 2012 (January 2013)

  29. Intake/Interview & Quality Review Sheet Form 13614-C

  30. RECORD KEEPING • Beginning 2011 tax filing season, we no longer will retain and send to the IRS: • A signed copy of Form 8879 and income statements (W2, W2G and 1099s’) • AARP will no longer permit retaining a copy with supporting documents at the site except for use with Form 8453 mailing • This will require sites to revise their e-filing procedures

  31. Tracking of Returnsfor E-filing • Each site will track returns to make sure the ERO knows which returns are ready for e-filing • Returns must be transmitted and accepted in a timely manner. • Each site must adopt a method to protect TP data and privacy

  32. Taxpayer Data and PrivacyPolicy The Site or ERO will not keep any forms or documents with a taxpayer identity and/or SSN that is not mandated by the IRS or a State. ie. Form 8453 if used for mailing

  33. Site sign-in/log sheet In addition to using Return Stage in TaxWise; The site will record on the site sign-in/log sheet the status of the return: Ready to e-file; Waiting for signature of Form 8879; Return will be paper filed; Waiting for Taxpayer documents Question only – no return prepared

  34. Modified TaxAide Site Sign-In Sheet

  35. Activity Report for Reporting

  36. Activity Report for Tracking E-File Returns - Transmitted

  37. Activity Report for Tracking E-Files - Acknowledged

  38. Line Added on AZ140 for Unpaid Use Tax

  39. SUPPORTING DOCUMENTATION • Pub 4012 Volunteer Resource Guide • Pub 4491 (hard copy or CD) Training Guide • Pub 4491W Comprehensive Problems & Exercises • Pub 17 Your Federal Income Tax Guide • Pub 6744 Volunteer Test/Retest

More Related