(Currently being updated for 2011 Tax Year) (Check Back After January 1, 2012)  Tax Bracket for 2011 Single  Head of Household Married Filing Jointly 10% Bracket $0 – $8,500 $0 – $12,150 $0 – $17,000 15% Bracket $8,501 – $34,500 $12,151 - $46,250 $17,001 - $69,000 25% Bracket $34,501 – $83,600 $46,251 - $119,400 $69,001 - $139,350 28% Bracket $83,601 – $174,400 $119,401 - $193,350 $139,351 - $212,300 33% Bracket $171,401 – $379,150 $193,351 - $379,150 $212,301 - 379,150 35% Bracket $379,151+ $379,151+ $379,151 ??% Bracket ? ? ?     Standard Deduction Amounts 2010  2011 2012 Married Filing Joint 11,400 11,600 11,900 Head of Households 8,400 8,500 8,700 Single 5,700 5,800 5,950 Married Filing Separate 5,700 5,800 5,950  Personal Exemption Amounts 2010  2011 2012   3,650 3,700 3,800          Student Loan Interest Deduction of $2,500 Phase Out 2010  2011 2012 Single Return Phase-Out 60,000- 75,000 60,000-75,000 60,000-75000 Joint Return Phase-Out 120,000-150,000 120,000-150,000 120,000-150,000     Phase-Out Ranges of Regular IRAs Where Taxpayer is an Active Participant 2010   2011 2012 Single Return Phase-Out 56,000-66,000 56,000-66,000 58,000-68,000 Joint Return Phase-Out 89,000 - 109,000 90,000-110,000 92,000-112,000     Phase-Out Ranges of Regular IRAs Where Taxpayer Files a Joint Return and Taxpayer is an Inactive Participant, but Spouse is an Active Participant 2010     2011 2012 Joint Return Phase-Out 167,000-177,000 169,000-179,000 173,000-183,000    ROTH IRA Phase-Out Ranges 2010  2011  2012 Single Return Phase-Out 105,000-120,000 107,000-122,000 110,000-125,000 Joint Return Phase-Out 167,000-177,000 169,000-179,000 173,000-183,000     Maximum IRA Contributions 2010  2011 2012 Under Age 50 5,000 5,000 5,000 Age 50 and over (by end of year) 6,000 6,000 6,000    Qualified Retirement Plan Limits - 401K 2010  2011 2012 Under Age 50 16,500 16,500 17,000 Age 50 and over (by end of year) 22,000 22,000 22,500     Qualified Retirement Plan Limits - SIMPLE 2010  2011 2012 Under Age 50 11,500 11,500 11,500 Age 50 and over (by end of year) 14,000 14,000 14,000     Benefit Limitations for Defined Benefit Plans 2010  2011 2012   195,000 195,000 200,000     General Allocation Limit for Defined Contribution Plans 2010  2011 2012   49,000 49,000 50,000     Maximum Compensation Considered 2010  2011 2012   245,000 245,000 250,000     General Allocation Limit for Defined Contribution Plans 2010  2011 2012   49,000 49,000 50,000      MSA High Deductible Health Plan - Maximum Deduct. 2010  2011 2012 Self 3,000 3,050 3,150 Family 6,050 6,150 6,300  MSA High Deductible Health Plan - Minimum Deduct. 2010  2011 2012 Self 2,000 2,050 2,100 Family 4,050 4,100 4,200  MSA Maximum Out-of-Pocket Expenses 2010  2011 2012 Self 4,050 4,100 4,200 Family 7,400 7,500 7,650  HSA High Deductible Health Plan - Maximum Out-of-Pocket Expenses 2010  2011 2012 Self 5,950 5,950 6,050 Family 11,900 11,900 12,000  HSA High Deductible Health Plan - Minimum Deduct. 2010  2011 2012 Self 1,200 1,200 1,200 Family 2,400 2,400 2,400  Maximum Contribution to HSA 2010  2011 2012 Self 3,050 3,050 3,100 Family 6,150 6,150 6,250      Foreign Earned Income Exclusion 2010  2011 2012   91,500 92,900 95,100     Estate & Gift Tax 2010  2011 2012  2013 Maximum Estate Tax Rate 35% 35% 35% ? Maximum Gift Tax Rate 35% 35% 35% 55% Annual Exclusion for Gifts 13,000 13,000 13,000 ? Value of Unified Credit: Estate Tax 5,000,000 5,000,000 5,120,000 ~3,000,000 Value of Unified Credit: Gift Tax 1,000,000 5,000,000 5,120,000 ~1,000,000 Generation Skipping Exemption 5,000,000 5,000,000 5,120,000 ~1,000,000                  FICA Wage Base 2010  2011 2012   106,800 106,800 ~110,700  PAYROLL TAX CUT FOR 2011 2% BACK IN YOUR POCKET.  Basically you’ll be paying 4.2% in payroll taxes for social security and Medicare in 2011, versus the normal 6.2% on the first $106,800 in income. PAYROLL TAX CUT FOR 2012 Nobody Knows!!!   Section 179 Expense Deduction Limits 2010  2011 2012 Overall Limit 500,000 500,000 139,000  Optional Auto Mileage Deduction 2010  2011 2012 Business Use (Cents Per Mile) 50.0 51.0/55.5 55.5 Medical & Moving (Cents Per Mile) 16.5 19.0/23.5 23.0 Charitable (Cents Per Mile) 14.0 14.0/14.0 14.0 BUSINESS EXPENSES To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. How to Capture Information Utilize a record keeping system to capture your expenses (financial information).  Enter into software like QuickBooks or Excel or on paper with categories like: ·         office expenses (supplies, furniture, equipment, etc.) ·         building expenses (rent, utilities, home office, etc.) ·         marketing (printing, postage, advertising, networking, etc.) ·         travel (meals, hotel, entertainment, airfare, cab etc.) ·         commissions and wages (referrals, employees, contract labor, etc.) ·         benefits (employee plans, retirement, pensions, etc.) ·         professional expenses (memberships, dues, subscriptions, etc.) ·         professional development (continuing education, conferences, etc.) ·         product (materials, inventory purchases, etc.) [Cost of Goods Sold] ·         repairs and maintenance (building, equipment, computer, etc.) ·         auto expenses (gas, depreciation, insurance, parking, etc.) ·         insurance (disability, health, worker's compensation, etc.) ·         professional fees (legal, accounting, consultants, etc.) ·         dues and subscriptions ·         taxes and licenses (payroll, property, sales, permits, etc.)   Just because you didn't get a receipt doesn't mean you can't deduct the expense. Keep track of those small items by writing down the date, vendor, amount, and description of the expense incurred. Top Possible Tax Deductions for Service-Based Businesses: ~ Rent (%) ~ Utilities (%) ~ Internet (%) ~ Movies, Publications (For Inspiration) ~ Laptops (%) ~ Software (%) ~ iPods (%) ~ Printers (%) ~ Mileage ~ Cell Phones (%) ~ Licenses and Subscriptions ~ Association Dues  Why Keep Records ·         Be better prepared for end of year reporting ·         Automated or online payments save more time and money than writing and mailing checks ·         Bookkeeping software makes reconciling easier to organize your income and expenses ·         You can provide your accountant with a printout or file at tax time. How to Keep Records ·         Create one place for all papers related to recordkeeping that needs to be captured or filed ·         Setup a schedule for recordkeeping and stick to it.  Depending on the type of business anything from a daily to monthly schedule could apply.  What Records To Keep A recordkeeping system should include a summary of transactions and documentation to support entries in the books.  Some types of records you should keep include: ·         Gross receipts - the income you receive from your business. o    Invoices o    Bank deposit slips o    Cash register tapes o    Credit card charge slips o    Receipt books   ·         Purchases/Inventory - the items you buy and resell to customers. o    Canceled checks o    Cash register tape receipts o    Credit card sales slips o    Invoices  ·         Expenses – the costs you incur to run your business. o    Canceled checks o    Cash register tapes o    Account statements o    Credit card sales slips o    Invoices o    Petty cash slips for small cash payments o    Employment taxes - the specific tax records you must keep are provided by your payroll service.   ·         Assets - the property (like equipment, furniture, buildings) you own and use in your business. You need records to compute annual depreciation and a gain or loss when sold. ·         Liabilities - the financial obligations of the business including notes, loans, mortgages, or other forms of debt.  How To Handle The Paper Utilize a corresponding filing system.  Create identical or similar categories for filing the paperwork. Keep annual records together in a file drawer or crate.  For business records, using hanging file folders (or even collapsible folder) for the major category and file folders for the specifics   ·         Bank                      Checking                      Savings                       Line of credit                       Credit Cards                      Loans  ·         Income            Invoices & Receipts for Payment (use 3-ring binder, or scan)  ·         Expenses            Create broad categories like insurance and divide in sub-categories like auto, business, etc)  ·         Miscellaneous categories            Do your best to utilize categories that make sense; stay away from using “other” or “miscellaneous” categories.  How To Prepare For Taxes And Close Out The Year ·         Contact your accountant early in tax season (before year-end preferred) ·         Evaluate your estimated tax payments so far for the year ·         At end of year, receipts are already filed by deduction category ·         Be prepared to forward financial information to your accountant (such as electronic files, bank statements, registers) ·         Start fresh with the current year's tax receipts Make sure to have a file folder for your notes at the end of the year regarding your tax decisions.  Note any changes or unusual transactions.  Simplify The Processes ·         Storage – keep all records for one year in one box with that year’s tax return and store in an accessible location with a backup copy and printout of year end reports ·         Bank statements – request a month-end cut-off date to save time reconciling – fewer checks remain outstanding ·         Be Consistent – in your categories for capturing and filing information             ·         Deposit Ticket Books – order the kind with a duplicate copy ·         Don’t Over-categorize – ·         Due Date Reminders – at the beginning of the year, mark on a calendar or create a list of due dates for taxes, etc. ·         Reduce Accounts – keeps bookkeeping simpler saving time and money.  One checking account with a debit card attached saves more recordkeeping time than one checking account and one credit card account. ·         Filing Paid Invoices – three-ring binder for the year, filed numerically. ·         Keep an audit trail – report of all checks and invoices in numeric order.  Don’t skip sequence – mark as void to assure no gaps in your sequence ·         Sorting  piles – banking, bills to pay, payment books for fixed obligations, receipts, insurance and investment statements ·         Paying off credit cards – list all cards, balances, interest rates.  Pay minimum on all cards except the highest interest rate card.  Pay as much as you can and when paid off, apply the money to the next highest rate card.      PERSONAL VS. BUSINESS EXPENSES Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. For your personal record keeping, create a file folder for each of the categories that apply:  ·         Pay Stubs ·         Bank Statements ·         Dividends Received ·         Other Income (1 folder for each source of other income, such as Social Security benefits, pension income, rental income, or alimony received) ·         Charitable Donations ·         Medical, Dental & Vision Expense Receipts ·         Prescription Receipts ·         Health Insurance Explanation of Benefit Statements ·         Taxes (such as real estate tax, quarterly estimated income tax payments & personal property tax) ·         Mortgage Statements ·         Other Interest Paid   ·         Unreimbursed Job Expenses ·         Miscellaneous Deductions (such as tax preparation fees, investment fees & safe deposit box) ·         Tax Forms (use to collect your tax statements)