2011 Federal Income Tax at a Glance

The following is a brief overview of tax items that are new, different or substantially revised for 2011.

The deadline to file personal tax returns is April 17, 2012. The extended deadline is October 15, 2012. This year's primary tax deadline falls on a Tuesday due to the Emancipation Day holiday in the District of Columbia, which is a federal holiday celebrated this year on Monday, April 16th. The traditional tax deadline of April 15th falls on a Sunday, and so the deadline is pushed to the next non-holiday, which this year is Tuesday, April 17th.

Capital gains and losses are reported on new Form 8949, with totals from that form reported on the Schedule D. This new reporting format coordinates with the new cost basis reporting requirement by brokers.

Standard mileage rates for 2011 are split into two amounts, each covering half the year, as follows:

Standard deduction amounts have increased. The 2011 amounts are

• Single: $5,950
• Head of Household: $8,700
• Married Filing Joint: $11,900
• Married Filing Separately: $5,950
• Qualifying Widow/Widower: $11,900
• Dependent: $950-$5,950

Personal exemption amounts have also increased. It is $3,700 for 2011, up from $3,650 for 2010.

Individual Retirement Account funding limits for 2011 remain at $5,000 for people age 49 or younger and at $6,000 for people age 50 or older. The deadline to fund an IRA retroactively for 2011 is April 17, 2012.

The self-employed health insurance deduction no longer offsets the self-employment tax (which was the case for 2010). The deduction still offsets the regular income tax as an adjustment to income on Form 1040.

Alternative minimum tax (AMT) exemption amounts increased slightly from 2010, but they are scheduled to decrease for 2012 unless Congress legislates a "patch" to the exemption amounts. The 2011 AMT exemption amounts are:

• $48,450 for single and head of household filers,
• $74,450 for married people filing jointly and for qualifying widows or widowers, and
• $37,225 for married people filing separately.

Health savings accounts (HSAs) and Archer MSAs now have a higher 20% surtax for non-medical distributions (previously was 10% for HSAs and 15% for MSAs). The rules have changed regarding non-prescription medications and supplies. Starting with 2011, medications and supplies eligible for tax-free payment through an HSA or MSA are prescription drugs, over-the-counter treatments with a prescription, and insulin. (Publication 969 and Notice 2010-59.)

Remember to include half of your 2010 Roth conversion if you elected to spread the income from a 2010 conversion over two years. Any conversions occurring in 2011 are fully taxable in 2011.

The alternative motor vehicle credit has expired for most vehicles. However, newly purchased fuel cell vehicles can qualify for a tax credit in 2011.

First-time homebuyer credit for 2011 is available only to members of the uniformed services or the Foreign Service.

Repayment of first-time homebuyer credit. Some taxpayers can report their repayments of the homebuyer credit directly on their Form 1040 without using Form 5405 as an attachment. Refer to the revised instructions for Form 5405.

Nonbusiness energy property credit for 2011 has a $500 lifetime maximum credit, rather than the $1,500 previous lifetime max. Refer to Form 5695 (which has instructions included on the form).

Foreign financial assets are reported on Form 8938. Taxpayers with financial assets held outside the United States may have to file new Form 8938 (instructions). The foreign asset disclosure form is separate and different from the foreign bank account report. Taxpayers with foreign assets may need to file both documents.

Schedule L has been retired from use. This form was previously used to calculate the standard deduction plus any additions to the standard deduction. Additional standard deductions expired at the end of 2009.

Making work pay credit has expired, and Schedule M has been retired from use.

Be sure to use the right address for mailing tax returns to the IRS, since the IRS occaisionally changes which processing center handles tax returns. The IRS posts current mailing addresses on their Web site.

Source: adapted from the What's New section of Publication 17.