Tax information

We received this from TaxACT today:

March 1 was the first tax filing deadline set in 1913. Fast forward to 2011 and the deadline is almost 50 days later. Though tax day has changed, the fact that tax law changes a lot hasn't. Neither has taxpayer procrastination.

Whether your readers, listeners or viewers file today or on April 18, here's what they need to know about this year's tax law changes:

• New or increased tax breaks include the self-employed health insurance deduction, increased standard mileage rates and elimination of modified AGI limit for Roth IRA conversions.
• While there aren't as many new credits or deductions as last year, many were extended or will expire after this year, including:
  1. Children & dependents: expanded dependent care, increased child tax, employer expenses for child care assistance, and third-child earned income tax credits
  2. Education: educator expense deduction, tuition and fees deduction, American Opportunity Credit, student loan interest deduction, increased Coverdell Education Savings Account contribution amounts, and employer-provided educational assistance
  3. Homeowners: nonbusiness energy and first-time homebuyer credits
  4. Itemizers: option to itemize State and local sales taxes
  5. Others: Making Work Pay credit and alternative motor vehicle credits
• Taxpayers who claimed the First-time Homebuyer Credit on 2008 returns must start repaying the credit on this year's return.

Following a few simple preparation tips can save taxpayers time, money and headaches.

1. We have 3 extra days to file this year, but why wait? Previously delayed returns with the tuition fees deduction, the educator expense deduction or Schedule A are being processed by the IRS without issue now. Procrastination can lead to stress and increased chance for error. Those who owe taxes can file now and schedule an electronic payment anytime between now and April 18. The IRS has yet to release a few forms; however, those don't apply to the majority of taxpayers.
2. Double check spelling of names, birth dates, SSNs, bank account information, etc. The IRS rejects returns if data doesn't match their or the Social Security Administration's records.
3. E-file unless claiming the First-time Homebuyer and Adoption Credits (the IRS requires returns with those credits to be mailed with specific documentation).
4. Choose tax preparation software or online solutions wisely. Most free solutions, in particular, offer limited forms and features, and state prices widely vary. TaxACT Free Federal Edition is the most complete free solution, and it's NOT just for simple returns. Everyone can prepare and e-file their federal return free, whether they itemize, have business income, investments, are self-employed or have rental income. TaxACT Free Edition also includes free e-mail tax and technical help, maximum refund and accuracy guarantees, data import from a PDF of last year's return prepared by 11 software solutions, and audit assistance. Automatic 6-month filing extensions can also be filed free. Try it risk-free at www.taxact.com.
5. Adjust 2011 federal withholding to account for the Making Work Pay credit that expires this year and the 2011 payroll tax holiday.

Visit taxact.com to learn more about tax law changes and TaxACT products.