1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return.

2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

3. Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the Social Security number of any dependent for whom you claim an exemption.

4. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status and any special taxes you owe.

5. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.

6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.

3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.

5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.

6. Health Coverage Tax Credit Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.

Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.

Homeowners still have time this year to make energy-saving and green-energy home improvements and qualify for either of two home energy credits.

The Nonbusiness Energy Property Credit is aimed at homeowners installing energy efficient improvements such as insulation, new windows and furnaces. The credit is more limited than in the past years, but can still provide substantial tax savings.

• The 2011 credit rate is 10 percent of the cost of qualified energy efficiency improvements. Energy efficiency improvements include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count.
• The credit can also be claimed for the cost of residential energy property, including labor costs for installation. Residential energy property includes certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel.
• The credit has a lifetime limit of $500, of which only $200 may be used for windows. If the total of nonbusiness energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.
• Qualifying improvements must be placed into service to the taxpayer’s principal residence located in the United States before January 1, 2012.

Homeowners going green should also check out the Residential Energy Efficient Property Credit, designed to spur investment in alternative energy equipment.

• The credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.

• No cap exists on the amount of credit available except for fuel cell property.

• Generally, labor costs are included when figuring this credit.

Not all energy-efficient improvements qualify for these tax credits, so homeowners should check the manufacturer’s tax credit certification statement before they purchase. Taxpayers can normally rely on this certification statement which can usually be found on the manufacturer’s website or with the product packaging. Eligible homeowners can claim both of these credits on Form 5695, Residential Energy Credits when they file their 2011 federal income tax return. Because these are credits and not deductions, they reduce the amount of tax owed dollar for dollar. An eligible taxpayer can claim these credits regardless of whether he or she itemizes deductions on Schedule A.

1. Check your Federal and State withholdings or estimated tax payments to make sure you’re having enough withheld, depending on your income.

2. If you’re a business owner, review your year-to-date financial statements to determine your estimated net profit; then review the tax implications with your tax preparer. If you’re a cash-basis business and wish to reduce taxable income, consider purchasing supplies and equipment (where you can take advantage of the Sec. 179 deduction or bonus depreciation), or prepaying next year’s insurance premiums.

3. If you’re thinking of starting a retirement plan, now is the time to set one up for 2011.

4. If you have a Health Savings Account, did you pay into it yet? For an individual plan, you can contribute up to $3,050 to the plan, and get an above-line deduction for the amount.

5. If you wish to donate cash or noncash items to your favorite charity, make sure you do it by the end of the year. Also, if you contribute $250 or more to a single charity, make sure you get a receipt.

6. If you need additional Itemized Deductions for 2011, consider paying the 2012 property tax installment in 2011.

7. If you have a dependent child in college, consider paying for the upcoming semester now, as well as for fees and course materials.

If you have any questions on tax-planning, please contact me!

Here are a few things the IRS wants you to know about recordkeeping.

1. In most cases, the IRS does not require you to keep records in any special
manner. Generally, you should keep any and all documents that may have an impact
on your federal tax return. It’s a good idea to have a designated place for tax
documents and receipts.

2. Individual taxpayers should usually keep the following records supporting
items on their tax returns for at least three years:

• Bills
• Credit card and other receipts
• Invoices
• Mileage logs
• Canceled, imaged or substitute checks or any other proof of payment
• Any other records to support deductions or credits you claim on your return

You should normally keep records relating to property until at least three
years after you sell or otherwise dispose of the property. Examples include:

• A home purchase or improvement
• Stocks and other investments
• Individual Retirement Arrangement transactions
• Rental property records

3. If you are a small business owner, you must keep all your employment tax
records for at least four years after the tax becomes due or is paid, whichever
is later. Examples of important documents business owners should keep
Include:

• Gross receipts: Cash register tapes, bank deposit slips, receipt books,
  invoices, credit card charge slips and Forms 1099-MISC
• Proof of purchases: Canceled checks, cash register tape receipts, credit
  card sales slips and invoices
• Expense documents: Canceled checks, cash register tapes, account statements,
  credit card sales slips, invoices and petty cash slips for small cash payments
• Documents to verify your assets: Purchase and sales invoices, real estate
  closing statements and canceled checks

For more information about recordkeeping, check out IRS Publication 552,
Recordkeeping for Individuals, Publication 583, Starting a Business and Keeping
Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses.
These publications are available at www.IRS.gov or by calling 800-TAX-FORM
(800-829-3676).

Links:

• Publications 552, Recordkeeping for Individuals (PDF)
• Publications 583, Starting a Business and Keeping Records (PDF)
• Publication 463, Travel, Entertainment, Gift, and Car Expenses (PDF)

1. American Opportunity Credit This credit, originally
   created under the American Recovery and Reinvestment Act, has been extended for
   an additional two years – 2011 and 2012. The credit can be up to $2,500 per
   eligible student and is available for the first four years of post secondary
   education. Forty percent of this credit is refundable, which means that you may
   be able to receive up to $1,000, even if you owe no taxes. Qualified expenses
   include tuition and fees, course related books, supplies and equipment. The full
   credit is generally available to eligible taxpayers whose modified adjusted
   gross income is below $80,000 ($160,000 for married couples filing a joint
   return).
2. Lifetime Learning Credit In 2011, you may be able to claim
   a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid
   for a student enrolled in eligible educational institutions. There is no limit
   on the number of years you can claim the Lifetime Learning Credit for an
   eligible student, but to claim the credit, your modified adjusted gross income
   must be below $60,000 ($120,000 if married filing jointly).
3. Tuition and Fees Deduction  This deduction can reduce the
   amount of your income subject to tax by up to $4,000 for 2011 even if you do not
   itemize your deductions. Generally, you can claim the tuition and fees deduction
   for qualified higher education expenses for an eligible student if your modified
   adjusted gross income is below $80,000 ($160,000 if married filing jointly).
4. Student loan interest deduction  Generally, personal
   interest you pay, other than certain mortgage interest, is not deductible.
   However, if your modified adjusted gross income is less than $75,000 ($150,000
   if filing a joint return), you may be able to deduct interest paid on a student
   loan used for higher education during the year. It can reduce the amount of your
   income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single
tax year. However, if you pay college expenses for two or more students in the
same year, you can choose to take credits on a per-student, per-year basis. You
can claim the American Opportunity Credit for your sophomore daughter and the
Lifetime Learning Credit for your senior son.

You cannot claim the tuition and fees deduction for the same student in the
same year that you claim the American Opportunity Credit or the Lifetime
Learning Credit. You must choose to either take the credit or the deduction and
should consider which is more beneficial for you.

September 15, 2011 – Final deadline for filing Corporate Income Tax Returns

October 17, 2011 – Final deadline for Individual Tax Returns

1. Move must be closely related to start of work Generally,
   you can consider moving expenses incurred within one year from the date you
   first reported to a new location, as closely related in time to the start of
   work.
2. Distance Test Your move meets the distance test if your new
   main job location is at least 50 miles farther from your former home than your
   previous job location was.
3. Time Test You must work full time for at least 39 weeks
   during the first 12 months after you arrive in the general area of your new job
   location, or at least 78 weeks during the first 24 months if you are
   self-employed. If your income tax return is due before you’ve satisfied this
   requirement, you can still deduct your allowable moving expenses if you expect
   to meet the time test in the following years.
4. Travel You can deduct lodging expenses for yourself and
   household members while moving from your former home to your new home. You can
   also deduct transportation expenses, including airfare, vehicle mileage, parking
   fees and tolls you pay to move, but you can only deduct one trip per person.
5. Household goods You can deduct the cost of packing, crating
   and transporting your household goods and personal property. You may be able to
   include the cost of storing and insuring these items while in transit.
6. Utilities You can deduct the costs of connecting or
   disconnecting utilities.
7. Nondeductible expenses You cannot deduct as moving
   expenses: any part of the purchase price of your new home, car tags, drivers
   license, costs of buying or selling a home, expenses of entering into or
   breaking a lease, security deposits and storage charges except those incurred in
   transit.
8. Form You can deduct only those expenses that are reasonable
   for the circumstances of your move. To figure the amount of your moving expense
   deduction use Form 3903, Moving Expenses.
9. Reimbursed expenses If your employer reimburses you for the
   cost of the move, the reimbursement may have to be included on your income tax
   return.
10. Update your address When you move, be sure to update your
    address with the IRS and the U.S. Postal Service to ensure you receive refunds
    or correspondence from the IRS. Use Form 8822, Change of Address, to notify the
    IRS.

For

Ten Tax Tips for Individuals Selling Their Home

The Internal Revenue Service has some important
information to share with individuals who have sold or are about to sell their
home. If you have a gain from the sale of your main home, you may qualify to
exclude all or part of that gain from your income. Here are ten tips from the
IRS to keep in mind when selling your home.

1. In general, you are eligible to exclude the gain from income if you have
   owned and used your home as your main home for two years out of the five years
   prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to
   exclude up to $250,000 of the gain from your income ($500,000 on a joint return
   in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the
   sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on
   your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report
   it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you
   figure the adjusted basis of the home you sold, the gain (or loss) on the sale,
   and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of
   your main home. You must pay tax on the gain from selling any other home. If you
   have two homes and live in both of them, your main home is ordinarily the one
   you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the
   date of purchase, the property is no longer used as your principal residence,
   you are required to repay the credit. Repayment of the full credit is due with
   the income tax return for the year the home ceased to be your principal
   residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the
   Credit. The full amount of the credit is reflected as additional tax on that
   year’s tax return.
10. When you move, be sure to update your address with the IRS and the U.S.
    Postal Service to ensure you receive refunds or correspondence from the IRS. Use
    Form 8822, Change of Address, to notify the IRS of your address change.

1. To qualify for a deduction, the expenses must be spent on a job search in
   your current occupation. You may not deduct expenses you incur while looking for
   a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking
   for a job in your present occupation. If your employer pays you back in a later
   year for employment agency fees, you must include the amount you receive in your
   gross income, up to the amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of your
   résumé to prospective employers as long as you are looking for a new job in your
   present occupation.
4. If you travel to an area to look for a new job in your present occupation,
   you may be able to deduct travel expenses to and from the area. You can only
   deduct the travel expenses if the trip is primarily to look for a new job. The
   amount of time you spend on personal activity compared to the amount of time you
   spend looking for work is important in determining whether the trip is primarily
   personal or is primarily to look for a new job.
5. You cannot deduct job search expenses if there was a substantial break
   between the end of your last job and the time you begin looking for a new one.
6. You cannot deduct job search expenses if you are looking for a job for the
   first time.
7. The amount of job search expenses that you can claim on your tax return is
   limited. You can claim the amount that is more than 2 percent of your adjusted
   gross income.  You figure your deduction on Schedule A.