My favorite season is about to kick off…tax season. This year we do not have many major changes in the tax law. Here is a brief summary of some changes to expect:
- Overall, many of the dollar thresholds were adjusted upward for cost of living increases. This includes tax brackets, standard deductions, retirement contribution thresholds and amounts, etc.
- The “Making Work Pay” credit is gone. For the past couple of years you received an extra $400 ($800 for a working couple) in your pocket. You will not see this on your 2011 tax return, so refunds should be smaller this year.
- Business mileage rates for 2011 were 51 cents per mile thru June 30 and jumped to 55.5 cents for the balance of the year. In 2012 business mileage will remain at 55.5 cents, medical and moving mileage will be 23 cents, and charitable mileage will be 14 cents per mile.
- The most daunting change will be the reporting of capital gains on your investments. A new Form 8949 for reporting capital gains/losses will be required to summarize your gains and losses before they flow to Schedule D. Form 8949 will separate the reporting of cost basis into three potential categories before short term and long term gains/losses are summarized.
- We do have until April 17th to file this year.
- Some other changes can be found on our website.
Have a happy season!
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author’s opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).
IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.