QUICK TAX TIPS
As all us are painfully aware of it is tax season once again. Here are some quick tax tips. Remember each person or filing entity has a unique tax position and not all items included as tips are applicable to all tax filers.
•· The standard business mileage allowance for year 2011 is increased to 51 cents per gallon and that is 1 cent higher than last year (2010). Moving and medical travel for year 2011 the allowance is 19.1 cents per mile. All charitable driving is allowed at the rate of 14 cents per mile. Self-employed individuals (virtually all real estate agents) should check to see which method provides the best benefit either the actual expense method or the standard mileage method.
•· Standard deductions (as opposed to itemizing deductions) will increase by a small amount. Married couples for tax year 2011 can claim $11,600; If one spouse is 65 or older the amount is $12,750; If both spouses are over 65 or over then $13,900 can be claimed; Single tax payers can claim $5,800; If a person is over 65 then the amount is $7,250. Heads of Household (qualification is necessary to be Head of Household) get to claim $8,500 and can add an additional $1,450 if they are 65 or older.
•· Personal exemptions increase to $3,750 for the filer and their dependents. The phase of personal exemptions for individuals or couples with incomes greater than specific amounts continues.
•· People receiving Social Security benefits will not obtain a cost-of-living increase once again for year 2011.
•· IRS audits of individuals increased during fiscal year 2010 to 1.11 % of income tax returns that were filed or this equates to one out of every 90 returns that were filed. Most IRS audits these days are done via mail inquiries. Don't be fooled by this. If you receive a mail request for data or whatever from the IRS take this very seriously and don't blow it off!
•· Real Estate Property flippers beware as the Tax Court recently ruled that property flippers can be classified as being "dealers" in real estate and all of their profits are then considered ordinary income and NOT capital gains. This situation could create a major tax liability.
Please consult with your tax advisor. My advice to everyone is to find a competent CPA who prepares a large number of individual tax returns each year and engage this person to be your tax advisor. It is even better if this person is a CPA and an Attorney but cost maybe very high with employing these folks.
I will write some additional blogs of quick tax tips as the tax season progresses.
If you have any questions about homes for sale in the Katy or surrounding areas or other questions contact me at bobgilbert2003@msn.com or visit us on the web at www.katyhomefinder.com TEAM DEVER...
Bob