you will never know when you get there."
Information posted on this website is not intended as personal tax advice.
Consult a tax advisor familiar with your situation before applying information found here. Copyright 2011. All Rights Reserved.
Professional Tax Services of Long Island, LLC
Professional Tax Services of Long Island, LLC
(516) 498-7533
(516) 498-7533
With 2011's legislative gridlock, 2012 is slated to be an uneventful year for tax changes. "The Bush Tax Cuts" were already extended for two years, ending in 2012. However, the social security tax holiday that lowered employee's social security taxes by 2%, is slated to expire 2011 year end unless Congress, once again, reinstates it. Below are highlights of tax law changes that are new for 2011, and unless tinkered with by Congress by the end of December, will remain in effect for 2012. The next few years, starting in 2013, will likely prove more substantive with the elections out of the way next year.
Make a detailed list of goods donated and their respective value. The organiztion will give you a receipt for the donation but they do not assign values for you. Note that the property donated must be in "good" (or better) condition, and your receipt from the charitable organization must say so to stand up to audit.
Tax rates from the “Bush Tax Cuts", leave tax rates unchanged. The lowest tax rate remains at 10% instead of rising
to 15%. The highest tax rate remains at 33% instead of 39.6%. The capital gains rates are described below.
Capital
Gains Rates remain between 0% and 15% on long term gains. Short term gains remain taxes at the ordinary income rate. Taxpayers in
the lowest tax bracket pay no federal taxes on capital gains. Higher rate taxpayers get a lower rate. Qualified dividends continue
to be taxed at the long term capital gains rate too.
New Tax Form for capital gains reporting will be introduced for 2011 tax filings.
Form 8949 separates the details of each transaction that use to be directly shown on the Schedule D. Cost basis reporting by
brokers started in 2011.
Alternate Minimum Tax (AMT) kicks in for joint filers with income exceeding $74,450, for single and
head of household filers with incomes exceeding $48,450, and for married individuals filing separate with incomes exceeding $37,225.
Social Security Tax on employee and self-employed income reverts back to the pre-stimulus level of 6.2% on the first $106,800 in income-
unless Congress passes an 11th hour extension. Given the fact that 2012 is an election year, the likelihood of politicians pulling
away the punchbowl is slim. So we would not be surprised by a last minute extension.
Innocent Spouse Relief no longer needs to be
requested within two years of when the IRS starts collection activity.