TAX UPDATE: What’s New

.

2011 Standard Deduction

The basic standard deduction for 2011 is:
Single or MFS.................................................................... $ 5,800
MFJ or QW........................................................................ $11,600
HOH................................................................................... $ 8,500
Age 65 and/or blind. The additional amounts for age 65 or
older and/or blind, per person per event in 2011 are:
MFJ, QW, or MFS............................................................... $ 1,150
Single or HOH.................................................................... $ 1,450
Taxpayer claimed as a dependent on someone else’s return. The standard
deduction in 2011 is the greater of $950, or earned income plus
$300, not to exceed $5,800, $11,600, or $8,500, depending upon filing status.
Add $1,150 or $1,450 (depending upon filing status) for age 65 or
older and/or blind.
Increased standard deduction. The provisions that increased the 2009
standard deduction for state and local property taxes, a net disaster loss
deduction, and the sales and excise tax deduction for the purchase of a
new vehicle does not apply for 2010 or 2011. The new law did not extend
these provisions.

2011 Personal Exemptions

The personal exemption per person for 2011 is............................ $ 3,700
Phaseout. For 2011 and 2012, the personal exemption phaseout does
not apply. Unless extended by Congress, the full phaseout of personal
exemptions will apply for tax year 2013.

2011 Itemized Deduction Phase-Out

For 2011 and 2012, the itemized deduction phaseout does not apply. Unless
extended by Congress, the full phaseout of itemized deductions will
apply for tax year 2013.

2011 Federal Tax Rate Schedule

Single Taxable Income
$ 0            to    8,500 × 10.0%        minus    $ 0.00          = Tax
8,501        to    34,500 × 15.0%      minus    425.00         = Tax
34,501      to    83,600 × 25.0%      minus    3,875.00      = Tax
83,601      to    174,400 × 28.0%    minus    6,383.00      = Tax
174,401    to    379,150 × 33.0%    minus    15,103.00    = Tax
379,151   and over    × 35.0%         minus    22,686.00    = Tax

MJF or QW Taxable Income
$ 0            to     17,000 × 10.0%      minus $ 0.00             = Tax
17,001      to     69,000 × 15.0%      minus 850.00            = Tax
69,001      to     139,350 × 25.0%    minus 7,750.00         = Tax
139,351    to     212,300 × 28.0%    minus 11,930.50       = Tax
212,301    to     379,150 × 33.0%    minus    22,545.50    = Tax
379,151    and over   × 35.0%          minus 30,128.50       = Tax

MFS Taxable Income
$ 0            to    8,500 × 10.0%        minus $ 0.00          = Tax
8,501        to    34,500 × 15.0%      minus 425.00         = Tax
34,501      to    69,675 × 25.0%      minus 3,875.00      = Tax
69,676      to    106,150 × 28.0%    minus 5,965.25      = Tax
106,151    to    189,575 × 33.0%    minus 11,272.75    = Tax
189,576    and over    × 35.0%        minus 15,064.25    = Tax

HOH Taxable Income
$ 0            to   12,150 × 10.0%      minus $ 0.00          = Tax
12,151      to   46,250 × 15.0%      minus 607.50         = Tax
46,251      to   119,400 × 25.0%    minus 5,232.50      = Tax
119,401    to   193,350 × 28.0%    minus 8,814.50      = Tax
193,351    to   379,150 × 33.0%    minus 18,482.00    = Tax
379,151    and over    × 35.0%       minus 26,065.00    = Tax

IRS Announces 2012 Standard Mileage Rates, Most Rates Are the Same as in July

WASHINGTON — The Internal Revenue Service today issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

55.5 cents per mile for business miles driven
23 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are in Rev. Proc. 2010-51.

Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
.