Do you know how the tax laws have changed in 2011 and how this may affect you? In a BLR webinar titled "Tax Savings for Small Businesses: How to Maximize Valuable Deductions and Avoid IRS Overpayments," Brian C. Greenberg, CPA, outlined some key examples:
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- The tax credit for energy saving home improvements dropped from 30 percent to 10 percent in 2011. Hopefully, if you are doing home improvement on your house you did it before December 31, 2010, because you would receive a 30 percent credit on the first $5,000 you paid in energy-saving home improvements. However, if you waited until 2011, that amount dropped to 10 percent. While this is still a good credit to take, the amount has changed and taxpayers need to be aware of that. If you intend to take this credit, you need to show that the money was paid and the work was done during the tax year you are claiming.
- The standard mileage allowance for deductions of travel expenses increased to 51 cents per mile, up 1 cent from 2010 due to increased gasoline costs. The IRS then increased the mileage again for the remaining half of the year. Read IRS Increases Mileage Rate for Last 6 Months of 2011.
- Some have wondered whether health care benefits would become taxable in 2011. However, that was never correct; it was a myth. Additionally, firms needn’t list the value of tax free health benefits on W-2 forms for 2011.
- Nearly all businesses must now wire tax deposits to IRS. This includes payroll taxes, corporate income taxes and estimates, excise taxes, etc.
- Individuals benefit this year from a social security tax cut from 6.2 percent to 4.2 percent. This 2 percent difference is the amount that employees do not have to pay in 2011. The maximum benefit is $2,136 per filer. Self-employed individuals get the break, too.
Brian C. Greenberg, CPA, is the founder of Brian C. Greenberg & Associates, LLC, a New Jersey-based tax accounting firm. (www.greenbergcpa.com) With 30 years of experience as an accountant, Greenberg has developed a diversified background to service his clients’ needs. Greenberg has extensive media experience both nationally and locally, commentating for the Wall Street Journal Report, Fox Business News, Bloomberg News, Forbes TV, and local TV in Philadelphia with ABC, NBC, and Fox. He has appeared as an analyst on the economy, stock market, taxes, budget issues, school issues, and more.
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