INDIVIDUAL TAX TIPS
IRS INCREASES STANDARD MILEAGE RATES
Effective July 1, 2011 the standard business mileage rate was increased from 51 cents to 55.5 cents per
mile. Other mileage rates that apply for medical purposes and certain moving expenses were increased
from 19 cents to 23.5 cents per mile. The old rate stays in effect for the first half of 2011. The mileage
rate for charitable endeavors remains at 14 cents a mile.
SUMMER CAMP EXPENSES MAY QUALIFY FOR A TAX CREDIT
Parents may be able to claim the Child and Dependent Care Credit for costs incurred during the summer
and throughout the rest of the year for the care of their children under age 13. This would include the
cost of day camp during the summer. Costs for overnight camp do not qualify. Whether your childcare
provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you
qualify for the tax credit.
PROTECT YOUR PERSONAL INFORMATION. BEWARE OF PHISHING.
Phishing is a scam typically carried out by unsolicited e-mail and/or websites that pose as legitimate
sites and lure unsuspecting victims to provide personal and financial information. In the past year I have
seen more and more phishing scams using the IRS as their lure, so please don’t bite on that lure. The
IRS does not initiate taxpayer communications through email. If you receive an e-mail claiming to be
from the IRS that contains a request for personal information; do not reply, do not open any
attachments, do not click on any links. Forward the e-mail as-is to the IRS at phishing@IRS.gov. After
forwarding, delete the original email.
COSTS OF CAREGIVERS CAN QUALIFY FOR MEDICAL EXPENSES
A son hired caregivers to assist his mother. Although the caregivers were not licensed health care
providers, the payments to them qualify as medical expenses. Her doctor certified that her dementia
endangered her health because she otherwise would not take her medications. This break is not limited
to dementia patients. The cost of maintenance and personal care services qualifies as a medical
expense for patients who are certified by a health care professional as being unable to do at least two
of the six activities of daily living … eating, toileting, transferring, bathing, dressing and continence. The
certifying professional can be a doctor, registered nurse or licensed social worker. In addition, that
person is required to approve the care program for the patient.
EXPANDED FORM 1099 REPORTING RULES FOR LANDLORDS REPEALED
In 2010, Form 1099 reporting requirements were extended to landlords as if they were a trade or
business. The Form 1099 Act of 2011 repeals this requirement for landlords. In other words the 1099
reporting rules for landlords do not change after 2010, so Form 1099 reporting is not required unless the
landlord’s rental activities rise to the level of a trade or business.
RESIDENTIAL ENERGY EFFICIENT PROPERTY CREDIT
This credit is available to individuals who install qualified residential alternative energy equipment, such
as solar hot water heaters, solar electricity equipment, wind turbines and geothermal heat pumps to
their homes. The credit, which runs through 2016, is 30% of the cost of the qualified property.
SERLE & ASSOCIATES CPA, LLC
BRIMFIELD, OH
330-678-8930
INDIVIDUAL TAX TIPS
PERSONAL ENERGY TAX CREDITS AVAILABLE FOR 2011
If you did not take the personal energy tax credit in years 2006 through 2010, then you can still take it
for 2011, if you purchased qualifying property such as energy efficient windows, a furnace, and doors.
The purchases must be certified for the credit and the credit is 10% of the purchase up to a limit of
$500.
SEVERAL TAX BREAKS ARE SCHEDULED TO END WITH 2011
These breaks include:
o Direct payouts to a charity of up to $100,000 a year from IRAs
o Write-offs for state sales taxes, college tuition and teachers’ supplies
o The AMT exemption is scheduled to fall after 2011
o The reduction in social security tax withholding
Very possibly, congress will extend some or all of the above tax breaks, but may not do so until 2012.
DEPENDENCY EXEMPTION FOR DIVORCED PARENT
If you are the non-custodial parent and entitled to the dependency exemption then you must have your
ex-spouse sign a properly completed Form 8332 and include it with your tax return. It is no longer good
enough to attach a copy of the court document.
MEDICAL EXPENSES QUALIFYING AS A DEDUCTION
If you have enough medical expenses to take them as an itemized deduction then the following
expenses also qualify as deductible:
o A portion of the cost of a special diet
o Fees remitted to alternative medical practitioners such as acupuncturists and
chiropractors
o Amounts paid to repair hearing aids
IRS TAX LIENs ON YOUR CREDIT
Hopefully you do not have a lien on your credit and you never get one. However if you do, you must ask
the IRS to withdraw a tax lien once the tax liability is fully paid. A withdrawal of a federal tax lien is a lot
more beneficial than a release because a withdrawal expunges the lien immediately from the debtor’s
records and it is as if the lien had never been filed. You can even ask for a lien withdrawal even if you
haven’t fully repaid the debt as long as the amount you currently owe does not exceed $25,000.
SEVERAL KEY CEILINGS ON RETIREMENT PLANS WILL BE HIGHER IN 2012
The maximum 401(k) contribution rises to $17,000 in 2012, up $500 more than this year
Individuals born before 1963 can put in as much as $22,500
The ceiling on SIMPLEs will remain $11,500
DO YOU HAVE A STUDENT LOAN?
The student loan interest deduction is currently scheduled to expire on December 31, 2012. One of the
best pieces of advice I can give you from both a tax and financial point of view is to focus on getting
these loans paid off by December 31, 2012.
SERLE & ASSOCIATES CPA, LLC
BRIMFIELD, OH
330-678-8930