The standard business automobile mileage rate deduction for 2011 is 51 cents
per mile through June and 55.5 cents per mile from July through December.  The 2011 rate per mile for charitable services is 14 cents per mile.  The medical per mile rate is 19 cents per mile through June, increasing to 23.5 cents per mile from July through December.

Medical expenses including health insurance are deductible as itemized deductions
only to the extent that they exceed 7.5% of your adjusted gross income.

Social Security recipients with a modified income over $34,000 for singles,
or $44,000 for married couples, will have 85% of their benefits taxed. 
Lower modified income will result in either 50% or 0% benefits taxed.

Individual Retirement Accounts limits are $5000 for 2011. Individuals age 50
as of 12/31/11 can make additional catch up contribution of $1000. You have
until April 15, 2012 to make your contribution. There are no income limits for contributions to a Traditional IRA, but deductible limits and thresholds apply. 
You must have earned income to contribute. 

Health insurance premiums for the self-employed are 100% deductible. 

For 2011, the “kiddie tax” applies to unearned income in excess of $1,900 for children.

There is a $1,000 child tax credit for your dependent child under 17.  The credit
is reduced for married taxpayers with AGI over $110,000.

The maximum tax rate on net long-term (assets held for more than one year) capital gains is 15%. For taxpayers in the 10% and 15% brackets, the rate is 0%.   A 25%
rate applies to real estate depreciation recapture and a 28% rate applies to
collectibles held more than one year.

Education credits:  American Opportunity and Lifetime Learning credits are available
for expenses paid for post-secondary education.  The maximum American Opportunity credit is $2,500 for all 4 years of college. The maximum Lifetime Learning credit is $2,000 for an unlimited number of years.  Both credits have gross income phase outs.

Above the line education deduction up to $4,000 with an income phaseout.

529 college savings plans provide tax-advantaged savings.

Qualifying individuals may claim an above-the-line deduction for up to $2,500 of
interest paid on a qualified higher education loan with an income phaseout.

Social Security wage base for 2011 is $106,800 and $110,100 for 2012. For 2011 and 2012, the tax rate for the employee portion of social security has been decreased from 6.2% to 4.2% through February, 2012.

The 2011 tax rates are as follows:

	Single	Married-Joint
10%	$          0 - $   8,500	$        0 - $ 17,000
15%	8,500 -    34,500	17,000 -    69,000
25%	34,500 -    83,600	69,000 -  139,350
28%	83,600 -  174,400	139,350 -  212,300
33%	174,400 -  379,150	212,300 -  379,150
35%	Over 379,150	Over 379,150

  

The business meal and entertainment expense deduction is 50% of otherwise
allowable costs.  Also, the deduction for club dues is non-deductible for
entertainment activities.  Professional and service organization dues are
deductible.

Social Security earnings limit for 2012 under full retirement age is $14,640.  Benefits are reduced $1 for each $2 earned above the limit, until full retirement age is reached.

Dividends paid by most corporations are taxable as long-term capital gains.  The
new 15% or 0% capital gain rate applies to qualified dividends received at any time
in 2011 and 2012.

Charitable contributions of cash must have receipts. Noncash donations of $250 require written acknowledgement from the organization.

Annual gift tax exclusion for 2011 and 2012 is $13,000 per recipient.

Click here to see Prior Tax Tips for 2010
Click here to see Prior Tax Tips for 2009