We have made it to our next tax season! While your taxes are not due for several weeks still, this is the month that you will be receiving the documents you need to turn in: all of your W-2s, any 1099s you may have received for investments, and so on. If you do not have a system in place to take care of your 2011 tax filing, now is the time.
Thanks to April 15 being on a weekend this year, taxes are not due until April 17 this year. If you cannot get your taxes filed by that point, you also have the option of filing for an extension until Oct 15. This is for filing, and not paying your taxes.
The IRS has made some adjustments to the way it requires people to file their income, particularly for capital gains taxes. They have developed a new form, Form 8949, that you will use for these gains or loses. This will be especially useful if you are reporting sales of stocks.
There has been a payroll tax on the books for the past couple years, and Congress has extended it to February 29, meaning you will be paying 2% less on social security wages through February at the least. If you make more than $110,000 per year, you will not need to pay social security.
Another major change is that a health insurance deduction for self-employed workers no longer offsets the self-employment tax. If you pay these premiums you can still deduct them from your 1040 however.
Finally, the Making Work Pay tax credit is no longer offered. For the past couple years many Americans got a $400 credit for working traditional daytime jobs. This has expired and there are no plans to renew it in the future. These changes have not drastically changed 2011 tax filing, but they are new for 2012 and are something to make note of.
What's New For Taxes by Steven Patterson