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2011 Tax Filing Season Gets Under Way with Many Changes - Emil Estafanous, CPA : Emil Estafanous, CPA

2011 Tax Filing Season Gets Under Way with Many Changes

The IRS started usurpation e-filed and Free File gain on Jan 14, imprinting a central start of a 2011 taxation filing season. However, many taxpayers will not be means to record until some time in Feb while a IRS updates forms and reprograms a systems to comment for legislative changes done late in 2010.

Individual taxpayers will have until Apr 18 to record their returns. Although a normal deadline, Apr 15, falls on a Friday, that day is a authorised holiday in a District of Columbia, and since D.C. holidays impact taxation deadlines in a same approach sovereign holidays do, all taxpayers are being given an additional 3 days to record their returns.

The IRS has announced that taxpayers who itemize deductions on Schedule A, as good as those who take certain recently extended deductions, will not be means to record their gain until mid- to late February. See “Tax Law Changes Will Delay Start of Filing Season for Some Taxpayers.”

For a 2011 filing season, a IRS is again creation accessible a online “Where’s My Refund?” tool, that can be found on a front page of a website.


For paid taxation lapse preparers, maybe a biggest procedural change this taxation deteriorate is that they contingency obtain and use a preparer taxation marker array (PTIN) when scheming returns. The IRS has launched an online PTIN registration site where preparers can obtain or replenish their PTIN. PTIN registration costs $64.25. Preparers can also request regulating a paper Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application.

Generally, on any taxation lapse or explain for refund, a preparer—whether signing or nonsigning—must yield his or her PTIN. However, a IRS recently supposing a list of 28 forms or array of forms that are not theme to a PTIN requirement—for a list, see “IRS Exempts CPA-Supervised Nonsigners from New Preparer Rules.”

Many CPAs have reported problems with a PTIN registration process, both online and regulating a paper form. See “PTINs a Pain for Some CPAs.”


While a immeasurable infancy of taxation practitioners already e-file, this taxation deteriorate outlines a initial year that e-filing is imperative for particular returns. Specifically, taxation lapse preparers who expect filing 100 or some-more sovereign particular or trust gain during 2011 are compulsory to e-file them.

2010 Tax Changes

A array of pieces of legislation enacted during 2010 will impact gain filed this season, as will changes enacted in progressing years. The 4 biggest taxation bills enacted in 2010 were a health caring remodel legislation (the Patient Protection and Affordable Care Act, P.L. 111-148, and a Health Care and Education Reconciliation Act, P.L. 111-152), a Small Business Jobs Act of 2010 (P.L. 111-240), and a Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act, P.L. 111-312).

Changes Affecting Individual Returns

Itemized deductions and personal exemptions: The itemized reduction reduction is repealed for 2010 (and by 2012). This means that taxpayers can concede a full volume of their itemized deductions in 2010. The personal grant phaseout manners also do not request in 2010 (and by 2012).

Alternative smallest taxation (AMT): The 2010 Tax Relief Act enclosed a patch of a AMT grant amounts for 2010 and 2011. For 2010, a AMT grant amounts are $47,450 for unwed people and $72,450 for married people filing jointly. The 2010 Tax Relief Act also extended (through 2011) a ability to use nonrefundable personal credits to equivalent AMT (under Sec. 26(a)).

First-time homebuyer credit: The Sec. 36 first-time homebuyer credit lapsed during 2010. It is accessible to authorised taxpayers who sealed on their home squeeze on or before Sep 30, 2010 (under a contracting agreement in place before May 1, 2010). The shutting date deadline was changed during a year from Jun 30 to Sep 30 by a Homebuyer Assistance and Improvement Act.

Rollovers to Roth accounts: The Small Business Jobs Act allows rollovers from elective deferral skeleton to Roth-designated accounts. If a Sec. 401(k) plan, 403(b) devise or bureaucratic 457(b) devise has a competent designated Roth grant program, a placement to an worker (or a flourishing spouse) from an comment underneath a devise that is not a designated Roth comment is accessible to be rolled over into a designated Roth comment underneath a devise for a individual. This sustenance is effective for distributions done after Sep 27, 2010. The taxable volume of a rollover contingency be enclosed in sum income (although for rollovers in 2010, a taxable volume is includible in sum income half in 2011 and half in 2012).

Extended Provisions for Individuals

A array of credits and deductions that had lapsed for 2010 were retroactively extended by a 2010 Tax Relief Act and are therefore accessible for taxpayers to explain on their 2010 returns. Those accessible to people embody a $250 reduction for facile and delegate schoolteachers for purchasing classroom supplies; a state and internal sales taxation reduction in lieu of a state income taxation deduction; a reduction for fee and associated expenses; and stipend for tax-free distributions from particular retirement skeleton for free purposes.

For a list of extended provisions, see “Congress Resolves Many Tax Issues During Lame-Duck Session.”

Changes Affecting Business Returns

The Small Business Jobs Act introduced a array of changes that might impact 2010 business returns.

Small business stock: The act combined a 100% ostracism of benefit from a sale of certain tiny business batch underneath Sec. 1202. To be eligible, batch contingency be purchased after Sep 27, 2010 (this sustenance has been extended by 2011 by a 2010 Tax Relief Act).

Section 179 expensing: The Small Business Jobs Act increasing a limit volume a taxpayer might responsibility underneath Sec. 179 to $500,000 and increasing a phaseout threshold volume to $2 million for taxation years commencement in 2010 and 2011.

Bonus first-year depreciation: The first-year 50% reward debasement accessible underneath Sec. 168(k) was extended for one year by a Small Business Jobs Act to request to skill acquired and placed in use in 2010 (or 2011 for certain permanent and travel property). This volume was afterwards increasing by a 2010 Tax Relief Act to 100% for business skill acquired after Sep 8, 2010, and before Jan 1, 2012, and placed in use before Jan 1, 2012 (or before Jan 1, 2013, in a box of certain property).

Business credits: The carryback duration for authorised tiny business credits underneath Sec. 38 was extended from one to 5 years. The Small Business Jobs Act also allows taxpayers to use authorised tiny business credits to equivalent both unchanging and choice smallest taxation liability. Both supplies are effective for credits dynamic in a taxpayer’s initial taxation year commencement after 2009.

Self-employed individuals’ health insurance: The Small Business Jobs Act allows self-employed people who concede a cost of health word for themselves and their spouses, dependents, and children who have not achieved age 27 as of a finish of a taxation year to take a reduction into comment in calculating net gain from self-employment for functions of SECA taxes. This sustenance relates to a taxpayer’s initial taxation year commencement after 2009.

Startup expenses: The Small Business Jobs Act increasing a Sec. 195 reduction for trade or business startup losses from $5,000 to $10,000 for taxation years commencement in 2010. The start of a reduction on a reduction is increasing from $50,000 to $60,000. So for 2010 a volume of a reduction is a obtuse of: (1) a volume of a startup losses or (2) $10,000, reduced (but not next zero) by a volume by that a startup expenditures surpass $60,000.

Cell phones: The Small Business Jobs Act private dungeon phones from a clarification of listed property. Thus, a heightened confirmation mandate and special debasement manners that request to listed skill underneath Sec. 280A will no longer request to dungeon phones.

Extended Provisions for Businesses

A array of business credits and deductions that had lapsed for 2010 were retroactively extended by a 2010 Tax Relief Act and are therefore accessible for taxpayers to explain on their 2010 returns. These embody a credit for investigate and growth expenditures and several empowerment section designations.

For a list of extended provisions, see “Congress Resolves Many Tax Issues During Lame-Duck Session.”

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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