As we welcome in the new year & say goodbye to 2011; we hope you had a very successful and enjoyable year. We look forward to seeing all the familiar faces in the coming weeks.
Included in this mailing you will find our tax organizer worksheet. This worksheet will help point the way as you gather your necessary tax documents & file your return for tax year 2011. The completion of this worksheet will also help us to expedite the preparation of your tax return. It is your responsibility to maintain the documentation necessary to support the figures used on your tax organizer worksheet.
If you are have been pre-scheduled for an appointment with Bernice in the past, you will find your appointment information enclosed. During this busy season it is essential that you call to reschedule or cancel before the time reserved for you. We will be happy to reschedule you to a time that better fits your schedule. I know this is boring but are you paying attn. If you have been with us in the past, you might find dropping your information off for Bernice a more convenient alternative that fits your busy schedule.
Filing Deadline - The official filing deadline for tax year 2011 is April 17th 2012. April 15th is a Sunday and April 16th is Emancipation Day. A holiday observed in the District of Columbia.
Reporting Capital Gains and Losses - Capital gains and losses will now be reported on the new Form 8949. Form 8949 is a 6 page form that will then be summarized and entered on Schedule D.
Standard Mileage Rates - The standard mileage rate for business, medical and moving all have two different rates in the year 2011. The rate depends upon it taking place before June 30th, 2011 or after July 1st, 2011. See table below:
Jan.1st- June 30th 2011
July 1st- Dec 31st
Business
51¢
55 ½¢
Medical
19¢
23 ½¢
Moving
19¢
23 ½¢
In addition to the standard mileage rate you may also take….. BERNICE GIVE INFO!
Nonbusiness Energy Property Credit - The Nonbusiness Energy Property Credit was reduced to 10% and will be limited if you have claimed it on a previous year’s tax return.
Foreign Financial Assets - If the value of any financial account held in a foreign country exceeds $10,000 the new Form 8938 must be filed with your return.
Circuit Breaker Tax Credit Increased - The credit is now allowed when the real estate tax payment or 25% of the rent exceeds 10% of the taxpayer’s total income. (Not to exceed $980.)
Health Insurance Penalty Increases - This penalty continues to be a forrmula based on your income, family size, and months without it. A 63 day gap in coverage is permitted. The maximum penalty for a single person has increased from $1,116 to $1,212.
Before bringing in your tax documents, please take the time to complete the tax organizer. This will help while gathering necessary documents to file a complete return. You may save taxes that you were unaware of.
If you have had an appt. in past years you will find an enclosed pre-scheduled appt card. Please call us in advance if the scheduled time is inconvenient. You may find an appt. unnecessary if you are a longstanding client & your financial situation has not changed. Tax information may be dropped off at your convenience (before scheduled appt.) for prompt service. Our hours are Monday-Saturday, 9-6.
For your paying convenience we continue to accept payment by credit card. We are available throughout the year to assist in tax situations, IRS correspondence, projections or amended returns. To keep the cost of tax preparation at an affordable rate, we will begin charging hourly for off-season assistance.
The following information will inform you of tax law changes & deductions that are now available.
Foreign Asset Disclosure - If you have a foreign account with the value exceeding $10,000 there is an additional return that is required.
E-Filing for Itemized Returns - Due to the Tax Relief Act passed Dec. 2010, the IRS subsequently updating their software program. They will not have the capacity to accept Sch. A returns until mid-February.
ATTN: Rental Property Owners & Business Owners - Congress has ruled that if you as a landlord or business owner pay any one company (service or supplies) more than $600 over a tax year span; you must issue that company a 1099-Misc. Please see us for additional instructions regarding this new, complex law.
American Opportunity Credit - (formally Hope Credit) This credit continues to be available through tax year 2012.
First-Time Homebuyer Credit - This credit has a maximum of $8,000. ($4,000 if MFS) This is for homes bought after 2008 & before May 1st, 2010. If you received $7,500 for the First-time Homebuyers credit, your $500 first payment will be figured into this year’s tax return.
Long-Time Resident Credit - If you have owned your home for 5+ years and have purchased a new principal residence after November 6th 2009 but before May 1st, 2010; then you may qualify for this maximum $6,500 credit.
Non-business Energy Credit - You may be able to take this credit for energy saving items placed in service the year of 2010. You can receive up to 30% back of your out-of-pocket expense. Examples of items that may qualify as Energy Saving are: insulation, exterior windows, skylights & doors, electric heat pumps, central AC, water heaters, Biomass fuel stoves, furnaces & boilers. They have extended, but reduced, this credit for 2011.
? O'Brien Tax and Financial Services
Standard Mileage Rates - The 2010 rate for business is 50 cents a mile. The 2010 rate for medical and moving is 16 1/2 cents a mile. Charitable miles are 14 cents.
Schedule M & Schedule L - Sch. M will only result in a credit if you have earned wages for 2010. Schedule L deduction limits will stay the same.
Circuit Breaker Credit - Massachusetts has increased the maximum Circuit Breaker Credit from $960 to $970. This is available if you are 65 yrs. old or older. This includes renters, along with home-owners.
Health Insurance Coverage - MA requires residents to have Health Insurance coverage. Please bring in your 1099-HC Form.
Jeff is available for scheduled appointments to discuss financial planning and investment opportunities.
We appreciate your business - past, present, and future.
Thank You,
Bernice Begley, EA
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