Certified Public Accountant
 Investment and Tax News2011 TAX NEWS CHANGES AFFECTING INDIVIDUAL RETURNS - Repeal of Limitations on Personal Exemptions and Itemized Deductions Extended Higher income taxpayers will not have personal exemption amounts reduced nor have their itemized deductions limited. This provision expires at the end of 2012. Investment Taxes: Rates continue at lower levels for both long term capital gains and dividends. For those taxpayers in the 15% tax bracket, the rate is 0%. For those in the 25% bracket and above, the rate on long term capital gains and dividends is 15%. This favored treatment is scheduled to expire at the end of 2012. Alternative Minimum Tax: The patch enacted by Congress set the AMT exemption at $47,450 for single filers and $74,450 for married taxpayers filing jointly. These exemption amounts are slightly higher than 2010 amounts and are scheduled to expire and revert to prior lower levels after 2011. Roth IRA Conversions: The income limit for converting regular IRAs into Roth IRAs has been permanently removed. However, taxpayers who make such conversions in 2011 will not have the option of deferring the conversion income over three years, as was the case for taxpayers who made such conversions in 2010. Cost Basis Reporting by Brokers: In an effort to improve compliance by taxpayers reporting capital gains, IRS is requiring brokers to report cost basis information on sales of stocks, real estate investment trusts and foreign securities for 2011. For tax year 2012 and later, the same requirement will also take effect for mutual fund, bond trades and related transactions. Other Tax News for 2011 Other Changes - The $250 deduction for teacher classroom expenses was extended; a deduction for state sales tax in lieu of state income tax was extended (this is beneficial to taxpayers whose state does not impose state income tax). These provisions are scheduled to expire at the end of 2011. KEY FIGURES FOR THE 2011 TAX YEAR
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