January 2011 Tax Moves

 

Jan. 1: Happy New Tax Year! It’s never too early to get ready for the 2011 tax season. You have 31 days to lower your 2010 tax bill. Let’s get to it!

Jan. 3: Welcome back to Tax Year 2011. Now that you’re feeling better, start gathering your 2010 tax material — deduction receipts, income data that you’ll compare to your official W-2 that will arrive shortly, relevant Social Security numbers — so when the IRS starts accepting tax returns, you’ll be ready to rock.
Jan. 10: Does your job include tips? If so and you received $20 in tips in December, use Form 4070 to report them today to your employer.

Jan. 6: You say you can’t wait for your refund.  You have refund loan alternatives that will get you your money almost as quickly and at less or no cost.

Jan. 12: So you’ve already decided that you don’t want to go it alone this filing season. Then start looking now for a tax professional. The good ones are booked early.

Jan. 14: It’s officially filing time!

The IRS begins accepting most electronically filed returns today. Note the word “most;” more on this in a minute.

Jan. 15: You weren’t able to submit your 2010 tax return yesterday if you claim deductions for state and local sales tax, higher education tuition and fees and/or educator expenses or if you itemize all your deductions. Because Congress took its sweet time in passing tax legislation affecting these filing areas, the IRS is still working on getting its computer system up to speed. So if your filing involves one or more of these tax areas, you must wait until mid- to late-February. This delay affects both electronic and paper filers. Sorry!

Jan. 17: Dr. Martin Luther King Day. No tax work on this federal holiday. But your actions today might help reduce your 2011 tax bill. MLK Day is a day of service, and while the time you volunteer to your favorite charity isn’t deductible, you can write off some other costs associated with volunteering.

Jan. 18: If you pay estimated taxes, your fourth and final installment for 2010 (1040-ES voucher number 4) is due today. You can skip this filing if you If you swear you’ll file your Form 1040 and pay any taxes due by Jan. 31.

Jan. 21: Are winter winds making you painfully aware that your home’s windows aren’t airtight? Unfortunately, the very generous home energy efficiency tax credit created in the 2009 stimulus bill expired on Dec. 31, 2010. But the newly-enacted tax legislation still provides a little bit of tax help here: a 10 percent credit, up to a maximum of $500 with $200 of that allowed for Energy Star replacement windows. Sorry again! Hey, why am I apologizing?!

Jan. 24: You’ll still claim the Making Work Pay credit on your 2010 tax return, but it’s no longer around for 2011. Instead, for 2011 (and this year only…so far) there’s a 2 percent payroll tax holiday for workers this year.

Jan. 27: Did you sell some stock in December to rebalance your portfolio and take advantage of tax losses? If you’re thinking of buying more of that stock or a similar one, make sure you don’t violate the wash sale rule.

Jan. 31: If you hired household help last year, you could be facing a tax reporting deadline today. It’s generally called the nanny tax, but the rules apply to all household workers, such as gardeners, in-home care workers and cleaning staff.