2011 TAX CHANGES

NEW, POSTPONED, OR SUNSET

 

STANDARD DEDUCTION - 2011

 

Married	$11,600
Single	$5,800
Heads of Household	$8,500
Married, Age 65 or older, add	$1,100
Single, Age 65 or older, add	$1,400

 

 

  

 

 

 

PERSONAL EXEMPTION – 2011

$3,650 per person

 

IRA & 401(k) CONTRIBUTIONS

 

IRA	$5,000
IRA (over 50)	$6,000
401(k)	$16,500
401(k) (over 50)	$22,000
SEP and KEOGH	$49,000

 

 

GIFT & ESTATE LIMITS  2011

 

Annual Gifting	$13,000	Per person Per Year
Estate Tax Exemption	$5 Mil.	Lifetime Per Person
	35% top rate
The Exemption is only in place for 2 years.

 

SUNSET PROVISIONS

Some of the provisions in the 2001 and 2003 Tax Relief Acts were extended for 2010 and have again avoided sunset:  

 

	2011	Sunset Provision
Capital Gains Rate	15%	2013 to 20%
Qualified Dividend Rate	15%	2013 to ordinary Tax Rate
Income Tax Rates	10% to 35%	In 2013 To 15% to 39.6%

 

 

PERSONAL EXEMPTION PHASEOUT:

The phaseout of personal exemptions has been eliminated for a second year in 2011.

 

ITEMIZED DEDUCTION PHASEOUT:

The phaseout of itemized deductions has been eliminated for a second year in 2011.

 

Phaseouts for Itemized deductions and personal exemptions are scheduled to return in 2013 without further legislation.

 

AMT EXEMPTION

The AMT exemption increased to $72,450 for marrieds and $47,450 for singles. Very large itemized deductions or exercise of ISOs can trigger AMT. This can be avoided with proper tax planning.

 

ROTH IRA ELIGIBILITY

Maximum contribution $5,000 (non-deductible); if 50 or older, maximum is $6,000.  An individual is eligible to contribute to a ROTH if AGI is within or below the following:

 

Married, filing joint	$169,000 to $179,000
Single	$107,000 to $122,000

 

2011 SOCIAL SECURITY TAX WAGE LIMIT

 

Social Security Tax (6.2%)	Up to $106,800
Medicare     (1.45%)	No Limit

 

Note: No cost-of-living adjustment was applied to Social Security benefits for 2011.

 

NEW or EXTENDED for 2011

 

• The American Opportunity Tax Credit for tuition expenses was extended for 2011 with a credit of up to $2,500.

 

• Employees will pay only 4.2% payroll taxes for 2011, while self-employed individuals will pay only 10.4% on income up to $106,800.

 

The Child Tax Credit of $1,000 per child has been extended for 2011 for married individuals earning less than $110,000 and for head-of-household filers earning less