Are you up-to-date on the new tax laws that will be imposed for 2011 and 2012? It’s important to know the new tax laws with the changes that have been put in place and their impact on you – Being aware of these changes  could save you and your clients a lot of money.

First of all, the standard deductions will be increased for most taxpayers. The increased amounts are reflected by the status you file for example:
Married couples filing jointly will be able to take a standard deduction of $11,600.
For Singles and Married couples filing separately they can take a standard deduction of $5,800.

Lower Tax Rates Extended – The 2010 Tax Relief Act extends through the end of 2012 the tax rates in effect in 2010. They had been scheduled to increase to the higher tax rates that were in effect prior to 2001.

Estate Tax – For individuals dying after 2010, the federal estate tax continues with a $5 million exemption and a 35 percent maximum rate. The current federal estate tax rules are scheduled to end after 2012.

Lower Capital Gains and Dividend Tax Rates Extended Through 2012. The tax rate reductions for long-term capital gains remain in effect for 2011 and 2012.

Mortgage Forgivemess Debt Relief Act and Debt Cancellation – This law which allows taxpayers to exclude income from the discharge of debt on their principal residence with a short sale or foreclosure will end on December 31, 2012.

Child Tax Credit – The credit of $1,000 per eligible child continues through 2012. The child tax credit was extended by two years by the 2010 Tax Relief Act.

Payroll Tax Credit – Starting in 2011, the partial credit for payroll taxes paid by employers is no longer available.

Section 179 Expense Deduction – The $500,000 maximum amount of equipment placed in service that businesses can expense and the annual investment limit of $2,000,000 remain in effect for 2011.

Tax Credit for College Tuition – The American Opportunity tax credit remains in effect through 2012.

Earned Income Tax Credit (EITC) – Temporary increases in the earned income tax credit for filers with three or more children and the higher income levels for the phaseout of the credit have been extended through the end of 2012.

Mortgage Insurance Premiums – The special itemized deduction for mortgage insurance premiums paid on mortgages taken out after 2006 expires on Dec. 31, 2010.

Credit for Energy-Saving Home Improvements – The 30 percent tax credit of the cost of energy-saving home improvements was extended by the Tax Relief Act of 2010 through 2011.

401k-Retirement Accounts – You can contribute more in your 401K-retirement account and your IRA account before having to pay tax on it.

IRS Milieage Tax Deduction – The IRS mileage deduction rate has increased.

Gift Tax – The gift tax exclusion has increased by $1,000.