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Posted 1/5/2012
2011 Filing Deadline Falls On April 17,
Other Special Filing Season Changes
Taxpayers across the nation will have until Tuesday, April 17, 2012, to file their 2011 income tax returns and pay any taxes due. Taxpayers get these two extra days because April 15 falls on Sunday, and Emancipation Day, a holiday in the District of Columbia, is observed the following day, on Monday, April 16. By law, filing deadlines that fall on D.C. holidays are extended to the next day that is not a Saturday, Sunday, or holiday. The April 17 deadline applies to any return or payment normally due on April 15. It also applies to the deadline for requesting a tax-filing extension and for making 2011 IRA contributions.
Refund Timing
The IRS notes that technology improvements have resulted in expectations that taxpayers will get their refunds in as few s 10 days this year if they e-file and request direct deposit. The IRS said it issues the vast majority (more than 9 out of 10) of all refunds - whether filed electronically or on paper - in 21 days or less.
Other Special Changes For 2011
Limited Nonbusiness Energy Property Credit
This 10% credit (down from 30 percent the past two years) is allowed for homeowners who make energy-saving improvements to their home, up to a maximum tax credit of $500 (down from the $1,500 combined limit that applied for 2009 and 2010). In addition, the energy standards are increased for most property; windows, exterior doors and skylights, for example, must meet Energy Star Program requirements.
Because of the way the credit is figured, it may only be helpful to people who make energy-saving home improvements for the first time in 2011. That is because homeowners must first subtract any credits claimed on their 2006, 2007, 2009 or 2010 returns before claiming the 2011 credit. The credit is allowed for high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and some roofs also qualify for the credit, though the cost of installing these items do not. See Form 5695 and its instructions for details.
Repayment of First-Time Homebuyer Credit
Taxpayers who claimed the first-time homebuyer credit for a home bought in 2008 must make the second of 15 annual repayment installments on their 2011 return. This repayment is reported on Form 1040 Line 59b. Also, taxpayers who purchased a home and claimed the credit, then sold the home or stopped using it as a principal residence in 2011 must repay the credit as well. This repayment is reported on Form 5405. The credit has expired for most homeowners, however, some members of the armed forces, Foreign Service, or intelligence services may qualify for the credit for a home purchased early in 2011. See the instructions to Form 5405 for details.
New Way to Report Capital Gains and Losses
In most cases, taxpayers now use new Form 8949 to report capital gain and loss transactions. Schedule D, the form traditionally used to show these individual transactions, is now used as a summary sheet, reporting amounts for total sales price, basis and other adjustments for all individual transactions, and for figuring the tax. For securities both bought and sold in 2011, the Form 1099-B, issued by the broker, normally shows the taxpayer's basis. The information on this form will help taxpayers correctly fill out Form 8949.
Reporting Roth Conversions
Several changes will affect Roth IRA reporting this year. As in 2010, income limits no longer apply to rollovers or conversions to Roth IRAs from other retirement plans. However, all of the income resulting from a 2011 conversion must be included on the taxpayer's 2011 return. See Form 8606 and its instructions for details.
For 2010 conversions, only half of the resulting income must be included in income in tax-year 2011 and the other half is reported in 2012, unless the taxpayer chose to include all of it in income for 2010. For those who did not make this choice, report the taxable amount on either Line 15b or Line 16b of Form 1040 for 2011.
AMT Exemption Increased
For tax-year 2011, the alternative minimum tax exemption increases to the following levels:
- $74,450 for a married couple filing a joint return and qualifying widows and widowers, up from $72,450 in 2010.
- $37,225 for a married person filing separately, up from $36,225.
- $48,450 for singles and heads of household, up from $47,450.
Health Insurance Deduction for Self-Employed People
In 2011, self-employed individuals and S corporation shareholders can use the self-employed health insurance deduction to reduce their income tax liability. The deduction is claimed on Line 29 or Form 1040. Premiums paid for health insurance covering the taxpayer, spouse and dependents qualify for this deduction. In addition, premiums paid to cover an adult child under age 27 at the end of the year, also qualify, even if the child is not the taxpayer's dependent. However, the deduction from self-employment income for determining self-employment tax, which was available only in tax-year 2010, no longer applies.
Change for HSAs and MSAs
Starting in 2011, the additional tax on distributions from a health savings account (HSA), not used for qualified medical expenses, increases from 10 percent to 20 percent. This tax is reported on Form 8889. Similarly, the additional tax on distributions from an Archer medical savings account (MSA), not used for qualified medical expenses, rises from 15 percent to 20 percent. This tax is reported on Form 8853.