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TAX TIPS & INFORMATION
Lower federal income tax was continued in tax years (TYs) 2010 and 2011 due to a number of tax breaks -- among them:
For individuals: Lower marginal and capital gain tax rates; enhanced deductions/credits for education, children, adoption, dependent care, EITC, etc.; deduction for state/local sales tax*; $250 deduction for classroom teachers*; and mortgage insurance premium deduction*.
For small business owners: Up to a 100% deduction for investment in new business assets, tax breaks for employer provided health insurance and child care, and credit for hiring unemployed veterans between 11/22/11 and 12/31/12, to name a few. Some tax breaks have expired, like the deduction of a self-employed individual's personal health insurance costs for calculation of SE tax (available only for TY 2010).
Green Energy: Various deductions/credits for the manufacture and purchase of clean energy and energy conserving products.
*Some tax breaks have not been extended and will not apply in TY 2012 unless Congress acts to apply them retroactively.
Estate and Gift Tax: Estate tax reinstated in 2011 but estates up to $5 million are excluded. Gifts up to $13,000 to each recipient are not taxable.
Social Security tax cuts: During 2011, millions of workers saw their take-home pay rise due to a temporary decrease in social security tax. This has been extended through 2012.
NOTE: Qualifications for these provisions are complex; further information is needed to determine if they apply to you.
