Three Tax Resources to Know About

You're motoring along working on your tax return ...Then, outta the blue, yikes! ....you run into that question that you're unsure about. It might be the number of deductions you can take, whether you are eligible for this credit, or how many business expenses you can claim. Whatever it is, you don't want to get it wrong and have the IRS come knocking at your door. But, you have other things that need to get done, and you just want to get this over with ...continued...

AGI Reduction for the Current Tax Year (2011 Tax Year to be filed April 2012)

Both itemizers and non-itemizing taxpayers want to keep their AGI to a minimum for tax reasons. In a normal year tax payers look at various techniques to reduce their AGI. This year there is an extra incentive to do so. In 2013 there will be a Medicare surcharge on high incomers to pay into Medicare Part B and Medicare Part D. Part B is for doctor visits and Part D is for prescription drugs. The catch is that this surcharge in 2013 will be based upon a person's 2011 income (AGI). Kind of an out of the ordinary curve ball.

We've put together a number of specific idea tips on how to reduce your AGI. See the"Reducing Taxable Income for Tax Purposes" section of tax-deduction-tips.com. Revisit these each year. It is a fluke that there is the extra reason to do so this year. If you expect your AGI to be greater than $85k ($170k marrieds), pay attention. This is the time to take the bull by the horns and do some of these.

Landmark Health Care Reform

The healthcare reform bill has become law. For 2010 through 2013, small businesses are eligible for a 35% credit for premiums paid for employee health coverage. See the Six Most Significant Tax Impacting Changes from the Healthcare Reform Act.

Did your family have high health care expenses last year?  Many  medical related expenses are tax deductible. Did you know that if you are self employed with a profit last year, your health insurance premiums may be fully deductible as above the line tax write-offs?   This means they do not have to get to the 7.5% of AGI level to be deductible.

Standard Deduction Increased for 2011

The new standard deduction is $11,600 for married couples filing a joint return, up $200, $5,800 for singles and married individuals filing separately, up $100, and $8,500 for heads of household, also up $100. The additional standard deduction for blind people and senior citizens is $1,150 for married individuals, up $50, and $1,450 for singles and heads of household, also up $50. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.

The Personal Exemption Amount Increase

The value of each personal and dependent exemption, available to most taxpayers, is $3,700, up $50 from 2010.

Tax Deductions for Other Taxes Paid, Gambling Winnings, and Charitable Donations of Vehicles:

Will you be charged taxes on gambling winnings from 2011?  Brush up on the rules for write offs for gambling losses before you make out your tax return.  Many people may be better off itemizing than taking the standard deduction. For folks wanting to make a charitable  donation of their car for tax purposes,  maybe you should and maybe you shouldn't donate.   We did not set out to be the only place in written electronic history to question giving a donation to charity.  Often times, though, this car donation  does not make economic sense - either for you or the charity. Review these rules before making this donation.

Make sure you don't miss out on these deductions for other taxes paid. Both non-itemizers and itemizers must take a close look at other taxes paid. You might find something you are entitled to deduct.

Tax Tables 2011

2011 Federal Income Tax Brackets: