Payroll tax cut extension

December 22, 2011, the House and Senate agreed to temporarily extend the payroll tax cut. For the first two months of 2012, a 4.2% Social Security tax continues to apply to workers' pay.

Qualified parking and employer-provided transit benefits

For 2011, an employee may exclude up to $230 a month of qualified parking and up to $230 for employer-provided transit and vanpooling benefits.

Payments to caregivers deductible as medical expenses

The Tax Court has held that payments made to caregivers for providing physician-ordered assistance and supervision to a patient suffering from dementia qualified as long-term care services and were thus deductible amounts paid for medical care.

Information Reporting Rules

The latest attempt to expand the information reporting rules for businesses was retroactively repealed by Congress for being too burdensome. Businesses, including rental property owners, do not need to furnish 1099-Misc forms to suppliers from which they purchase more than $600 worth of merchandise.

2011 Mileage Rates Revised

The Internal Revenue Service announced on June 23, 2011 an increase in the standard mileage rates for the final six months of 2011. The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011 through December 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011. The new six-month rate for computing deductible medical or moving expenses will also increase 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

MEDICARE

If you plan to delay receiving social security benefits because you are working, you should sign up for Medicare three months before reaching age 65, regardless of when you reach full retirement age. Otherwise, your Medicare medical insurance, as well as prescription drug coverage, could be delayed and you could be charged higher premiums.

Two bonus depreciation deductions for one expenditure

When otherwise eligible MACRS property or computer software is acquired via a Code Sec. 1031 like-kind exchange, both the carryover basis and the excess basis, if any, of the acquired property are eligible for bonus depreciation. It does not matter if bonus depreciation was claimed on the old property.

Medicare Premiums - Self-employed health insurance

The IRS has changed its mind on whether self-employed individuals can deduct Medicare premiums as part of their above-the-line deduction for health insurance on From 1040. In the past, the agency said that was a no-no. In 2010 the agency says it's okay. If you missed the write-off on your 2010 return file an amended return to claim the break and get a tax refund for any amount you overpaid.

Small Business Health Care Tax Credit

Included in the Affordable Care Act enacted in March, the small business health care tax credit is designed to encourage small businesses to offer health insurance coverage to their employees. It is specifically targeted to help small businesses that primarily employ moderate- and lower-income workers.

2011 Mileage Rates

Beginning on January 1, 2011 the standard mileage rates for the use of a car will be $.51 per mile for business miles driven, $.19 per mile driven for medical or moving purposes and $.14 per mile driven in service of charitable organizations.