• 4th quarter estimated payment due January 17, 2012
• W-2′s, 1099′s are not required to be mailed until January 31, 2012.
• Tax day this year falls on Tuesday April 17, 2012 as there is a holiday in Washington D.C.
• Make sure you have all your tax documents in hand, before seeing your tax preparer.

A couple items you should be aware when filing your tax return for 2011.

• Don’t forget to repay the first time home buyer credit.
• There is a new form 8939 to report capital gains and losses.
• As in 2010 income limits no longer apply to Roth conversions.

This is just a brief overview, consult your tax advisor for additional information.

• 55.5 centers per mile for business
• 23 cents per mile for medical or moving
• 14 cents per mile for charity

This means that the business standard mileage remains the same as it has been since July 1, 2011.  The medical and moving was actually reduced .5 cents per mile.

Remember to included the personal use of company vehicles on the employee’s W-2 if that is applicable to you.

For more information check out http://tinyurl.com/7av7xru

Remember it is only an extension to file and not an extension to pay.  The taxes due were actually due in April, so if you still owe for 2010, you will be assessed a late payment penalty and interest.

If you need additional information or have comments please let us know.

Large estates, opting out of the estate tax, will have until January 17th, 2012 to file Form 8939.  This is the special carryover basis form, required of estates making this choice.  The form was previously due on November 15, 2011.  The due date has been changed, so no need to file an extension.

2010 estates that request an extension on Form 4768 will have until March, 19, 2012 to file Form 706 or Form 706-NA provided you have timely filed form 4768.  For estates of those dying between December 16, 2010 and January 1, 2011, the due date is 15 months after date of death.  There will be no late filing or late payment penalty assessed, though interest still will be charged on any estate tax paid after the original due date.

There is also special penalty relief for individuals, estates and trusts that already filed a 2010 federal income tax return, or obtained an extension and plan to file by the October 17, 2011 extended due date.  The late payment and negligence penalty relief applies to persons inheriting property from a decedent dying in 2010, who then sells the property in 2010 but improperly reports gain or loss because they did not know whether the estate made the carryover basis election.

You can get the draft of the form at the the following website and read more about the details.  Check it out http://tinyurl.com/6hgxy2w

• 3rd Quarter 1040 Estimated Payments
• Form 1120 C Corporations
• Form 1120s S Corporations
• Form 1041 Estates and Trusts
• Form 1065 Partnerships

For the 1120s and 1065 returns if you file late the penalty is $195 per month or part of  (maximum 12 months) times the number of shareholders.  Note this applies if there is no tax due with the return.

For the 1041 returns if you file late the penalty is 5% of the tax due for each month or part of up to a maximum of 25% of the tax due.  If the return is more than 60 days late the penalty is smaller of $135 or the tax due.

For the 1120s and 1120c returns with a balance due if you file late the penalty is 5% of the tax due for each month or part of up to a maximum of 25% of the tax due.  If the return is more than 60 days late the penalty is smaller of $135 or the tax due.

If you are late with your estimated payment they will charge you an interest and penalty for not filing on a timely basis.

*W-2 employee job(pay for services)
*Self employment income(baby sitting, lawn mowing, etc.)
*Investment income(Interest from banks, your Disney stock)
*Some scholarships and fellowships

Wages and Salaries included the following:
*Tips your employer gives you from credit card sales
*Tips your customers give you directly
*Tips split with other employees
You should track this with some sort of daily record or log.

Self Employment Income includes the following:
*Babysitting
*Lawn mowing
*handy man work, etc.

If you had net earnings after deduction of $400 or more you owe what is called self employment tax.
This is why it is important to track all your legitimate expenses such as mileage and supplies you use.
**Please note the above mentioned services are not self employment income if you were considered an employee and worked for someone else.

A few suggested tips for parents and the students:
*Set up a Roth IRA for the young worker
*Make sure you keep detail records of income and expense if you are self
employed.

As always please talk to your tax adviser for any specific guidance on tax matters and please feel free to contact us if you have questions or comments you would like to add.

There are other pitfalls and taxable income that you should be aware regarding scholarships, investment income.  You can find out more information about the summer jobs by going to the IRS website http://tinyurl.com/q73vh

The new rates are as followed:

• Business 55.5 cents per mile
• Medical/Moving 23.5 cents per mile
• Charitable(same)  .14 cents per mile

This is of course not the first time that we have had to deal with two sets of mileage rates in a calendar year.  If you want to read the IRS article on the new mileage rate, please click the following link http://www.irs.gov/newsroom/article/0,,id=232017,00.html

Also don’t forgot to keep that mileage log or invest in one of the GPS mileage logs.  Just keep track of the easiest way possible as you can see the mileage can be a good deduction if you drive a fair amount of miles for business.  There are even apps for your Smart phone that will handle some of this.

Example if you drive 10,000, your deduction would be $5,550.

The other this whole thing on holding up most of the adoption credit refunds had to have cost the government quite a bit as of course they have to pay us interest.  For example on our refund they are paying us $46.99 in interest.  That can add up will fast.

Again this whole thing has to be related to congress attempting to gather data or something, because obviously anyone that did a adoption and had the visa’s spent way more than the credit limit.  Most of the money went to the adoption agency.

It looks like this chapter on our refund is finally coming to an end.

I immediately faxed it to him the next day and it has been about a week and half since the time I faxed it to him.  He said as soon as he receives it, he will close out my case.  Still no word on my refund and after I had spoken to the IRS, we than received letter indicating that they received our paperwork dated May 11^th and they are processing it.

I have also checked the IRS website under Wheres my refund http://www.irs.gov/individuals/article/0,,id=96596,00.html?portlet=8 .

The site has not updated since it was changed to that they are processing it back sometime in March.

Hopefully one day we will receive our refund, we surely could use it about now.

*You expect to owe at least $1,000 in tax for 2011 after subtracting your withholding and any refundable credits.

*You expect your withholding and refundable credits to be less than the smaller of:

-90% of the tax expected on your 2011 tax return or 100% of the tax shown on your 2010 tax return.

The easiest way is to look at Line 60 of your 2010 1040 which is your total tax and subtract the withholding you expect to have for 2011 and divide by 4 and make those payments on the due date for estimated discussed later.

*There is an exception to this rule is if your AGI is more than $150,000 you need to take line 60 by 110% and divide by 4, and essentially pay in 110% of your 2010 tax liability

The other option is if your income is going down or you have uneven income throughout the year you can actually calculate it every quarter and pay based on an annualized income method.

*For example for the payment due June 15^th you would figure your income and deductions for the first 5 months and than annualize that number and than calculate the tax based ¼ of the annualized tax.

Generally most people pay estimated taxes based on 2010 tax, but some do calculate it each payment.

The following is the payment due dates for the remainder of 2011

2^nd payment       June 15, 2011

3^rd payment       September 15, 2011

4^th payment       January 17, 2012

Feel free to contact us if you need additional information about paying and calculating estimated taxes.