Tax laws sometimes change, expire or get extended. The list below is not exhaustive, but is a useful reminder as we file 2011 federal tax returns and plan our 2012 withholding.
Although most of us can no longer claim the First-Time Homebuyer Credit, the law granted certain members of the Armed Forces, certain members of the Foreign Service of the United States, and certain employees of the intelligence community additional time to buy a qualifying home. Remember: Taxpayers may be required to repay the First-Time Homebuyer Credit. Generally, taxpayers must repay any credit claimed if the qualifying home was sold or if the home ceased to be the taxpayer's main home. Use IRS Form 5405.Generally, taxpayers who claimed the credit for a home purchased during 2008 are required to repay the credit in 15 equal installments, beginning with their 2010 tax return. Use line 59b on Form 1040.
In most cases, you must report your capital gains and losses on the new IRS Form 8949 and report the totals on Schedule D. If you sold a covered security in 2011, your broker will send you a Form 1099-B showing your basis. This will help you complete Form 8949. Generally, a covered security is a security acquired after 2010.
The additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses has increase to 20 percent for distributions after 2010.
If you had foreign financial assets in 2011, you may have to file new IRS Form 89238 with your return.
The Making Work Pay Credit has expired. You cannot claim it on your 2011 return.
You cannot claim the Alternative Motor Vehicle Credit for a vehicle you bought after 2010, unless the vehicle is a new fuel cell motor vehicle.
The standard mileage rate applicable to 2011 for business use of your vehicle is increased to 51 cents a mile (55.5 cents a mile after June 30, 2011). The 2011 rate for use of your vehicle to get medical care or to move is increased to 19 cents a mile (23.5 cents per mile after June 30, 2011). In addition, beginning in 2011, you may use the business rate for a vehicle used for hire, such as a taxicab.
The Adoption Tax Credit offsets qualified adoption expenses. Taxpayers who adopt a child may qualify for an enhanced adoption tax credit for tax year 2011. The amount of the tax credit is as much as $13,360 for 2011. To claim the credit for 2011, both Form 8839 and the required adoption-related documentation must be attached to the federal tax return. For that reason, claimants cannot file electronically. More information is available on http://www.irs.gov/.
Several Education Credits are available. The American Opportunity Tax Credit is available through 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. The student must be enrolled at least as a half-time student. Educational institutions are required to file and provide you with a Form 1098-T, Tuition Statement, for each enrolled student. Lifetime Learning Credit: In 2011, taxpayers may be able to claim a Lifetime Learning Credit of up to $2,000 per return for qualified education expenses paid for one or more students enrolled in eligible educational institutions. Tuition and Fees Deduction: Taxpayers may also be eligible to claim the tuition and fees deduction. For more information download Publication 970 (Tax Benefits for Education) at www.irs.gov or call 1-800-TAX-FORM.
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