Individual Tax Guide
Filing basics
In a time of sweeping change and continuing economic uncertainty, finding ways to minimize your tax liability and bolster your financial position can be a challenge. In 2011, important tax-law changes affected areas ranging from family finances to home ownership. However, what remains constant is the need for in-depth knowledge and insight when preparing your income taxes.
Health Care
Learn about Flexible Spending Arrangements and Health Savings Accounts.
Home Ownership
When you sell your principal residence, you can exclude from income up to $250,000 in gains. Special rules are provided for certain circumstances and keep in mind that if you took a First-time Homebuyer Credit, you may have to repay or recapture some or all of the loan/credit in 2011.
Employment
Many unreimbursed expenses incurred as a result of employment are deductible as miscellaneous itemized deductions, though they can only be claimed to the extent they are greater than 2% of adjusted gross income (AGI).
Children and Education
For 2011, the Child Tax Credit is worth $1,000 for each qualifying child who is under age 17 at the end of the calendar year and who qualifies as a dependent. If you have children in day care or college, you can also take advantage of other credits.
Investors
If you have investments, it it important to know the maximum tax rate on your net long-term capital gains. If your capital losses exceed your capital gains, you can deduct up to $3,000 in net long-term and short-term capital losses against ordinary income ($1,500 if married filing separately). Any remaining net capital losses may be carried over to future years.
Retirement
Tax-advantaged retirement plans can help you lower your current tax bill and save for retirement. Find out more about IRAs and 401(k) plans.
Common Deductions
A tax deduction differs from a tax credit, which is applied directly to your tax bill, reducing it dollar for dollar. Deductions reduce the amount that is taxable. You can get tax deductions for such things as charitable contributions, student loan interest, mortgage interest and more.