Let’s face it: Tax time this year could be confusing with all the extensions and proposed legislative changes. With just two months left to tax time, we thought it would be helpful to unearth some free tools on calculating and filing your taxes this year, as well as to outline some of the expiring deductions for 2011 taxes and possible expirations for 2012.
Your 2011 federal income tax returns are due April 17 (April 15 is a Sunday, and April 16 is Emancipation Day – a Washington holiday).
The American Institute of Certified Public Accountants has a helpful online list of expiring provisions (at http://bit.ly/y23mcT). For instance, 2011 will be the last year that individuals who itemize deductions will be able to elect to deduct state and local general sales tax in lieu of state and local income tax.
And neither the above-the-line deduction for qualified higher-education expenses nor the above-the-line deduction for up to $250 of out-of-pocket classroom expenses paid by education professionals will be available starting with the 2012 tax year.
The institute has a handy marginal tax rate calculator online (at http://bit.ly/zoc9np). This calculator helps you estimate your average tax rate for 2011, your 2011 tax bracket, and your marginal tax rate for the 2011 tax year.
IRS Free File is available at www.irs.gov/freefile, and it provides a list of Free File Alliance member companies. IRS Free File offers free federal tax services for taxpayers with a 2011 income of $57,000 or less. Taxpayers who visit the site may either choose one type of filing software that fits their needs, or may use the “help me find a company” tool.
After selecting a tax-software company, users will be transferred to the company’s website to prepare, complete, and electronically file their federal income tax returns. The service is also available in Spanish.
Remember, Free File is just for federal returns: These companies have their own eligibility criteria, but none offers Free File to taxpayers with an adjusted gross income of more than $57,000. Other eligibility criteria may include your age, state, and eligibility for the Earned Income Tax Credit, or military status. Check the company websites for details, because their offers may differ. For example, some charge a fee for state tax returns, and some may not support a particular form you need to file. Remember to begin your Free File return at IRS.gov, or you may be charged a fee or asked to buy additional products and services.
Grant Thornton has information on updated income tax brackets, which were adjusted anywhere from a few hundred dollars at the lower brackets to several thousand at the top brackets (athttp://bit.ly/xGvNM7).
For tax-planning basics, visit Citrin Cooperman’s 2012 tax guide (at http://bit.ly/q7KUps).
For example, the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 retroactively brought back the estate tax for 2010, but, through 2012, provided an exemption increase and a rate reduction compared with 2009. (There’s a good chart on tax exemptions and highest rates under the tab “Estate Planning.”) The act also temporarily provided exemption “portability” between spouses.
Isdaner & Associates offers a handy comparison chart (at http://bit.ly/yimhov). The table provides federal tax information for 2012 compared with 2011, and some of the dollar amounts change due to inflation. Other amounts are changing due to legislation.
The Eisner Amper 2012 Personal Tax Guide is free and downloadable in PDF file form and in an e-book version for Barnes & Noble Nook or Amazon Kindle, either complete or in chapter form. Seehttp://bit.ly/wxhxg1.
Abo & Co., Certified Public Accountants/Litigation & Forensic Consultants also has a guide for minimizing gains from selling a home or selling a mutual fund and helpful hints on the “nanny tax” rules –http://bit.ly/xuFtf8 – and a place to download forms and track your refund (http://bit.ly/ylpzMP).