10 Changes From 2011
That Benefited Most Taxpayers
Roth conversions to changes in reporting capital gains and
losses, there were a number of tax changes in 2011. Whether
you already know about them or simply need a reminder, here's
a look at 10 changes in 2011 that might benefit you, the
taxpayer, this tax season.
1. April 17 Tax Deadline: Two Extra Days to File and Pay
Taxpayers across the nation will have until Tuesday, April 17,
2012, to file their 2011 income tax returns and pay any taxes
due. Taxpayers have extra time because April 15 falls on
Sunday, and Emancipation Day, a holiday in the District of
Columbia, is observed the following day on Monday, April 16.
By law, filing deadlines that fall on D.C. holidays are
extended to the next day that is not a Saturday, Sunday, or
The April 17 deadline applies to any return or payment
normally due on April 15. It also applies to the deadline for
requesting a tax-filing extension and for making 2011 IRA
contributions. Taxpayers requesting an extension will have
until Oct. 15 to file their 2011 tax returns.
2. Tax Credits Extended
Legislation, enacted in December 2010, extended several
popular tax benefits, including the American opportunity
credit for parents and students, the enhanced child tax credit
and the expanded Earned Income Tax Credit.
3. Limited Non-business Energy Property Credit Still
This credit generally equals 10 percent (down from 30 percent
the past two years) of what a homeowner spends on eligible
energy-saving improvements, up to a maximum tax credit of $500
(down from the $1,500 combined limit that applied for 2009 and
2010). In addition, the energy standards are increased for
most property; windows, exterior doors and skylights, for
example, must meet Energy Star Program requirements.
Because of the way the credit is figured, in many cases, it
may only be helpful to people who make energy-saving home
improvements for the first time in 2011. That's because
homeowners must first subtract any non-business energy
property credits claimed on their 2006, 2007, 2009 or 2010
returns before claiming this credit for 2011.
The cost of certain high-efficiency heating and air
conditioning systems, water heaters and stoves that burn
biomass all qualify, along with labor costs for installing
these items. In addition, the cost of energy-efficient windows
and skylights, energy-efficient doors, qualifying insulation
and certain roofs also qualify for the credit, though the cost
of installing these items do not.
4. Repayment of First-Time Homebuyer Credit
Taxpayers who claimed the first-time homebuyer credit for a
home bought in 2008 must generally make the second of 15
annual repayment installments on their 2011 return.
Separately, a repayment requirement also applies where a
taxpayer purchased a home and claimed the credit on a prior
year return and then sold it or stopped using it as a main
home in 2011.
Though the credit has expired for most home buyers, certain
members of the armed forces and some other taxpayers who
bought a home early in 2011 may still qualify for the credit
on their 2011 return.
5. New Way to Report Capital Gains and Losses
In most cases, taxpayers now use new Form 8949 to report
capital gain and loss transactions. Schedule D, the form
traditionally used to show these individual transactions, is
now used as a summary sheet, reporting amounts for total sales
price, basis and other adjustments for all individual
transactions, and for figuring the tax. For securities both
bought and sold in 2011, the Form 1099-B, issued by the
broker, normally shows the taxpayer's basis.
Note that this is only a PARTIAL LIST (5 of the
first 10) and you can
click here to read the rest of the article.
Please contact us if you need help understanding which tax
changes will help you and your family or business situation. We are always
available to assist you.
As always you can call our offices if you have any
questions about these or any other accounting, tax,
financial planning or insurance related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA
President, Sullivan & Company