Can you believe we are coming to the end of 2011?
With the closing of another year, we make sure that our fiscal responsibilities are organized and ready to go for 2012.
Among the things on our list, are taxes. And so, we asked a tax pro in our area - Joni - to offer some year-end tax tips.
Joni – can you tell us about any new changes in tax law for 2012 that we need to be aware of?
I can tell you that the 401K and 403B maximum contribution goes from $16,500 in 2011 to $17,000 in 2012. No other retirement vehicles were increased. The social security wage base went to $110,100 from $106,800. Social Security recipients are receiving a 3% cost of living increase in 2012. They have not had an increase in 3 years. However, their Medicare premiums increased. For 2012, mileage for business will be $.555, medical mileage will be $.23, and charitable is unchanged at $.14
And then, what are some last minute deductions folks can still make for their ’11 return?
As always, the charitable contribution needs to be made within the year and it shows up on the charitable statement the organization provides. The organization needs to have it on 12/31/11 so that it gets posted. If you mail it by end of year, it will probably get posted in the next year. If charged on a credit card by 12/31/11, you can take the deduction even if you do not pay for it until the following year.
Try to mail your January 1 mortgage payment before to see if you get 13 months of interest on your statement.
Be prepared for your net payroll check to decrease if Congress does not do anything regarding the payroll reduction as the current 2% reduction for employees expires on 12/31/11.
Utilize your Medical Flex Spending account so that you do not lose it.
Any other year-ending tax advice to throw in the mix?
Joni, is with Joni L. Craft, P.A. She has offices in Minneapolis and Rochester, MN.