(1) The start of the 2011 tax filing season will begin in January, as usual, for most taxpayers. However, because of last week’s Tax Act, with several provisions that affect 2010, the IRS will need time to reprogram its processing systems.
Returns that include the state and local sales tax deduction, adjustments to income for higher education tuition and fees and educator expenses, and itemized deductions on Schedule A will need to wait to file their tax returns until tax processing systems are ready, which the IRS estimates will be in mid- to late February. The IRS will notify us when their systems are ready.
We have the irresponsible idiots in Congress to thank for these delays.
(2) The IRS has announced minor COLA adjustments to some items for 2011.
• The 2011 personal exemption is $3,700, up $50 from 2010.
• The 2011 Standard Deduction is $11,600 for married couples filing a joint return, up $200, $5,800 for Single filers and married individuals filing separately, up $100, and $8,500 for Head of Household, also up $100. The additional standard deduction for blind people and senior citizens is $1,150 for married individuals, up $50, and $1,450 for singles and heads of household, also up $50.
• Cost of living adjustments have been made to the Earned Income Credit. For 2011 the maximum investment income allowed under EIC is $3,150, up $50 from $3,100.
• For 2011 the Modified Adjusted Gross Income (MAGI) threshold for phase-out of the Lifetime Learning credit begins at $102,000 for joint filers, up from $100,000, and $51,000 for singles and heads of household, up from $50,000.