2011 Basic Changes
Exemption Amount: $3,700
Standard Deduction
Basic amounts for 2011 are:
Head of Household – $8,500
MFJ and Qualifying Widow(er)s – $11,600
MFS – $5,800
Single – $5,800
Additional standard deduction for Aged and Blind:
$1,150 for each
$1,450 if the individual is unmarried and not a surviving spouse
Standard Mileage Rates
The rates for 2011 are:
Business purpose (Applies to up to four vehicles):
January 1 – June 30: 51 cents per mile
July 1 – December 31: 55.5 cents per mile
Medical/Moving purposes:
January 1 – June 30: 19 cents per mile
July 1 – December 31: 23.5 centers per mile
Charitable Contributions: 14 cents per mile
Section 179 Expense Limits
Maximum Section 179 deduction: $500,000
Maximum cost before the limit is reduced: $2,000,000
5% Capital Gains rate remains at 0%
The 15% capital gain rate remains the same.
Income from Credit Cards and Schedule C
As a reminder, beginning with calendar year 2011, banks will be issuing new information on Form 1099-K for their 2011 income received via credit cards.
The amounts from Form 1099-K must be reported on a separate line on the 2011 Schedule C.
The new income section for Schedule C will have a new look:
Line 1a: Merchant card and third party payments
Line 1b: Gross receipts or sales not reported on Line 1a
Line 1c: Total Gross Receipts
Line 1d: Returns and allowances plus any “cash back”
included on Line 1a
Line 1e: Net Gross Receipts
There will also be two questions added to Schedule C, E and F asking if the business made any payments in 2011 that require it to file Form(s) 1099 and, if so, did they or will they file all required Form(s) 1099.