Top Five Tax Law Changes for 2011, 2012

As you prepare to file your schedule 1040 tax form, there are a few things you should know before you start. There are some new tax laws that may allow you to claim more tax deductions on your tax return.

Here are the Top Five Tax Changes:

1. The American Recovery and Reinvestment Act
2. IRA Deduction Expanded
3. Standard Deduction Increased for Most Taxpayers
4. 2011 Standard Mileage Rates
5. Child Tax Credit Change

I will briefly touch on each of these topics and then you can go gather more information on the subjects pertaining to you.

American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act provides tax incentives for first time home buyers, taxpayers who purchased new cars, people who made their primary homes more energy efficient, parents and students paying for college, and people who received unemployment compensation.

IRA Deduction Expanded

If you were covered by a retirement plan and your 2011 modified adjusted gross income was less than $66,000 or $110,000 if you are married filing a joint return, you may be able to take an IRA deduction.

New Standard Income Tax Deduction for Most Taxpayers

The deduction rates have changed for most. For example, if you’re married filing jointly, a widow, or widower, the standard deduction is $10,700. There is also an additional standard deduction based on state or local sales or excise taxes paid on the purchase of most vehicles. There are also some others which would increase your deduction and if you use online tax software, the program will find all of these for you.

2011 Standard Mileage Rates

For the business use of a vehicle, the standard mileage rates have changed. The mileage rate for 2011 for business purposes is 51 cents per mile. If you happen to be deducting for medical purposes or a move, the mileage rate for 2011 is 19 cents per mile.

Child Tax Credit Change

If you were some of the lucky few who were able to invest income for your child, the amount has increased to $1,000 before it will be taxed at the parent’s rate.

Schedule 1040 Tax Forms

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I like the fact that the tax software searches for over 350 different deductions for me. I have immense peace of mind knowing my math calculations will be accurate, and I also love the fact that my 1040 tax form will comply with all the new tax laws. If you would like the same for your tax return, and many more benefits, try TurboTax Online Today!