2011 Individual Federal Tax Return
Preparation Guide
This attorney drafted guide sets forth notable dates and a helpful
guide to preparing your 2011 individual federal tax returns.
ALL INFORMATION AND FORMS ARE PROVIDED “AS IS” WITHOUT ANY WARRANTY,
EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING AS TO THEIR LEGAL EFFECT AND
COMPLETENESS. They are for guidance and should be modified to meet your needs and the
laws of your state. Use at your own risk. Docstoc and anyone who participated in providing or
modifying any form is not creating or entering into an Attorney-Client relationship. Docstoc
© Copyright 2012 Docstoc Inc. does not provide legal advice. The information and forms are not a1 substitute for the advice of
your own attorney.
Important Deadlines: ..................................................................................................................................... 4
What is my filing status?............................................................................................................................... 5
Single: ....................................................................................................................................................... 5
Married: .................................................................................................................................................... 5
Married and Filing Separately: ................................................................................................................. 6
Qualifying Widow/Widower with Dependent: ......................................................................................... 6
Head of Household: .................................................................................................................................. 6
Which tax return form do I use? ................................................................................................................... 6
How do I complete Tax Form 1040? ............................................................................................................ 6
How do I complete Form 1040-A? ........................................................................................................... 7
How do I complete Form 1040-EZ? ......................................................................................................... 7
What Can I deduct?....................................................................................................................................... 7
Dependents:............................................................................................................................................... 7
Tuition and Student Loan Expenses: ........................................................................................................ 8
Homeowner Credits: ................................................................................................................................. 8
Energy Credits: ..................................................................................................................................... 8
Mortgage: .............................................................................................................................................. 8
Real Estate Taxes: ................................................................................................................................. 8
Disaster repairs: .................................................................................................................................... 8
First Time Homebuyer Credit: .............................................................................................................. 9
Making Work Pay Credit: ..................................................................................................................... 9
Unemployment: ........................................................................................................................................ 9
Should I e-file or use the traditional paper filing method? ........................................................................... 9
Tips for Filing a Paper Return................................................................................................................. 10
What to do if I owe money, or if I am owed money? ................................................................................. 10
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What if I can’t file my tax return by April 17, 2012? ................................................................................. 10
Getting ready for next year! ........................................................................................................................ 11
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2012 Individual Federal Tax Return Preparation Guide
Once you have determined you are required to file an annual federal tax return, there are several
important considerations which will be discussed in this guide. These include calendaring of
important deadlines, a determination of which filing status to claim and tax form to file, and
whether or not you wish to file a paper form or an electronic copy of the form. Additionally,
before beginning to prepare your tax return, you should have all necessary paperwork on hand, to
ensure a more streamlined process. These forms include your W-2s, 1099s, social security
numbers of all dependents, and any receipts or forms for deductions you may be claiming,
including any charitable deductions or medical expenses.
The IRS is working hard to make it even easier for taxpayers to prepare their taxes in a timely
and efficient manner, and answer taxpayer questions in a variety of social media. The 2012 tax
season has brought the newest electronic update, with the introduction of IRS2Go, which is a
free smartphone application which can be downloaded by taxpayers, and may be utilized to
subscribe to tax tips and update the status of taxpayer’s refunds. The IRS may also be found on
Youtube and Twitter (@IRSnews) for additional tax tips. Every year, the IRS updates its forms
and guides, to provide taxpayers with the most up to date information on available (and expired)
exemptions, claims and deductions, and taxpayers would be wise to consult these documents to
ensure they are taking all the applicable deductions, exemptions and claims available to them.
The scope of this informational guide cannot possibly touch on every exemption, possible
deduction or situation. Nor should it be used as an instructional guide on how to file your taxes.
It is provided for informational purposes only and is not intended to provide tax or legal advice.
If you find yourself in a situation not addressed in this guide, or if you have questions related to
your specific tax filing needs, consult the IRS website or an experienced tax professional.
Important Deadlines:
When preparing to file your annual federal tax return, it is important to plan ahead so that you
are prepared to file your return or an extension request in a timely manner. The first step in your
preparation should be to identify and calendar all of the important and required filing dates and
deadlines. Below is a list of important filing deadline dates that you should be aware of. This
list is not all-inclusive and you should take the time to identify any other dates and deadlines that
may apply in your unique situation to assure full and timely compliance. Please note, the
following deadlines apply ONLY to individual federal tax return filings. Individual filers are
urged to consult the IRS website or a tax professional to ensure they understand all applicable
filing dates, as some exceptions to the dates noted below may apply depending on your particular
situation. The IRS website can be accessed at www.irs.gov.
Persons filing corporate or any other tax returns should consult IRS Publication 509 (2012) for
applicable filing deadlines. This document can be accessed at the IRS website
http://www.irs.gov/publications/p509/index.html.
January 17, 2012 – First day you are able to e-file your individual tax returns
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January 31, 2012 – Last day for employers to mail W-2s and for businesses to provide
1099 (other than 1099-B and 1099-S statements)
February 15, 2012 – Last day for financial institutions to furnish 1099-B and 1099-S
statements.
April 17, 2012 – Deadline to file for any of the following: individual federal tax return
(Forms 1040, 1040A or 1040EZ); automatic 6-month extension; last opportunity to file
an original or amended 2008 tax return and receive any refund owed. It is also Taxpayers
are advised, however, that the deadline to file the necessary returns does NOT provide an
extension of time to pay any taxes owed. Penalties and interest which apply as a result of
any unpaid taxes begin to accrue as of the date the tax return filing was due. First quarter
estimated tax payments due.
June 15, 2012 – Second quarter estimated tax payments due.
September 15, 2012 – Third quarter estimated tax payments due.
October 17, 2012 – Automatic 6-month filing extension deadline.
What is my filing status?
One of the first considerations you should make after calendaring your important dates and
gathering all the necessary paperwork to prepare your tax return forms is to determine your filing
status. Your filing status will determine the tax rate you will pay on your interest income and
any standard deductions you may claim. Your filing status is determined by your marital status
as of the last day of the tax year. If you got married at any time during the past tax year, you will
be considered married for the entire year. If you were divorced at any time during the past tax
year, and did not subsequently get remarried, you will be considered unmarried for the entire
year. The various filing statuses and some major considerations with respect to each are as
follows:
Single:
This filing status is appropriate if you are not married, or you were divorced in the past
year or are legally separated from your spouse. If you are single but claim a dependent, it
is important to determine if you should file as Head of Household, which may provide
more tax advantages. If you are divorced, with a dependent, ensure your custody
agreement and/or divorce decree permits you to claim the dependent, as many only
permit you to claim the dependent every other year.
Married:
This filing status is appropriate if you are married and are not filing separately.
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Married and Filing Separately:
This filing status is appropriate if you are married and not filing jointly. This may be the
least beneficial filing status; however, it can help couples attain separate tax liabilities,
which may be appropriate in their particular circumstances.
Qualifying Widow/Widower with Dependent:
Surviving spouses receive the same standard deduction and tax rates as married taxpayers
filing jointly. You qualify for this status if all the following apply: your spouse has died
within the last two years; and you have a child or stepchild whom you will claim as a
dependent and who lived in your home for the entire tax year, with the exception of brief
absences; and you will pay over half the cost of keeping up your home; and you could
have filed a joint return with your spouse the year he or she died, even if you did not
actually do so.
Head of Household:
This filing status is appropriate when you are single and claim at least one dependent, and
may provide a higher standard tax deduction.
Which tax return form do I use?
Taxpayers should reconsider the tax form they use each year, as personal situations may change
over the course of time. The standard income tax form is the Form 1040, which has several
variations: the 1040, 1040A and 1040EZ. The Form 1040 is commonly referred to as the long
form, as it contains more schedules than the 1040A and 1040EZ, and is appropriate for
individuals or couples with more complicated filings. Even if you filed 1040A last year, you can
still file a form 1040 this year, if your situation has changed. Such changes may include
itemized deductions you are now entitled to take or income adjustments.
Form 1040 may be used for filers who have: itemized deductions; income received from the sale
of a property; self-employed persons; taxable income of over $100,000 per year.
Form 1040A may be used for filers who: claim the standard deduction; have above the line
deductions; have capital gain distributions; have income under $100,000 per year.
Form 1040EZ may be used for filers who: are under 65 years old (both individual and spouse);
have no dependents; are filing single or married filing jointly; have taxable income under
$100,000 per year, with taxable interest income less than $1,500.
How do I complete Tax Form 1040?
Form 1040, when used by the appropriate filers, can be used to report income, claim tax
exemptions, deductions and credits, as well as calculate the applicable tax rate. Taxpayers
utilizing this form can download the 2012 form and applicable instructions directly from the IRS
website. Prior to beginning, you should have your all forms on hand, including those for income
and expenses. These may include your W-2 or 1099 forms (including those for any escrow
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interest or other interest income earned during the year), as well as any other necessary receipts
for deductions, including but not limited to the mortgage interest receipt from your bank, or
student loan interest from your loan servicer.
When completing the 1040 income portion, your W-2 and/or 1099 forms will provide the
information you need to complete the sections pertaining to wages, tips and salaries and income
earned. The 1040 form also contains exemptions, which allows you to deduct from your
otherwise taxable income. These exemptions can take the form of either a spousal or
child/dependent deduction. In certain instances, there are relatives other than a child or step
child who may qualify as a dependent. If you find yourself in a situation where you support a
relative who is not your child or stepchild, he or she may qualify as your dependent, and
therefore, you may be able to claim a deduction for that relative. Persons in these situations
should consult IRS publication 501 for more specific information regarding the tests for claiming
such deductions. Lastly, Form 1040 permits you to deduct for certain specific allowable
deductions, including but not limited to things like school tuition, medical expenses and qualified
retirement contributions. It will also include line items for income tax credits, which reduce the
amount of tax you would otherwise owe. After completing the income, exemption and deduction
sections, you will calculate the tax owed and applicable refund or payment amount due. Be sure
to sign your name where indicated prior to filing your return!
How do I complete Form 1040-A?
Form 1040-A, known as the “short form”, when used by the appropriate filers, can be used to
report income, deductions and credits, as well as calculate the applicable tax rate. Taxpayers
utilizing this form can download the 2012 form and applicable instructions directly from the IRS
website. Prior to beginning, you should have your all forms on hand, including those for income
and expenses. Remember also to consider your filing status, as it can directly impact any refund
you may be entitled to or tax you may owe.
How do I complete Form 1040-EZ?
Form 1040-EZ when used by the appropriate filers, can be used to income and credits, as well as
calculate the applicable tax rate. This form is designed for very simplified tax filings, and does
not allow for any itemized deductions. Taxpayers utilizing this form can download the 2012
form and applicable instructions directly from the IRS website.
What Can I deduct?
This guide does not set forth all the available deductions or credits which individual taxpayers
may claim. Below, however, are some commonly deductible expenses and/or new tax breaks for
this year you may wish to claim if applicable. Please consult the applicable requirements for
each of the following, if you claim them.
Dependents:
If you have minor dependents, you can generally claim a child care credit, in addition for
your standard dependent deduction. The credit can be worth between 20 and 35 percent
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of up to $3,000 of qualified expenses per child under the age of 13, or $6,000 for two or
more children. The credit amount decreases as adjusted gross income increases.
Parents who initiated and finalized an adoption by the end of 2011 may qualify for the
expanded Adoption Credit, the credit for which is worth up to $13,170 and is refundable.
Tuition and Student Loan Expenses:
The refundable American Opportunity Credit, expanded Student Loan Interest Deduction
and expanded Coverdell Education Savings Accounts contribution limit add up to $7,000
in savings on 2011 and 2012 federal returns. Plus, you may be able to deduct up to
$4,000 in tuition and fees from your 2011 income.
Homeowner Credits:
Energy Credits:
The Nonbusiness Energy Property Credit is worth up to $500 for insulation, exterior
windows and doors, central air conditioners, water heaters and other improvements.
Caps on the credit have been placed on furnaces, water boilers, windows, water heaters,
air conditioners and biomass stoves, so if you are claiming any of the above, please
review the requirements carefully. In addition, if you claimed the credit on either your
2009 and/or or 2010 returns, you must subtract the collective amount from the $500
available for 2011.
Investing in solar hot water property, geothermal heat pumps and wind property before
Dec. 31, 2016, may also have tax benefits. The nonrefundable Residential Energy
Efficient Property Credit allows you to claim 30 percent of the expenditures, although
certain improvements have caps.
Mortgage:
Although mortgage interest is typically deductible up to 100%, depending on your
adjusted gross income, mortgage insurance premiums paid on a qualified mortgage can
count toward your 2011 mortgage interest deduction.
Mortgage debt forgiven by virtue of foreclosure, short sale and/or loan modification will
not be taxed as Cancellation of Debt Income on most primary residences, through 2012.
Real Estate Taxes:
Homeowners can deduct up to $1,000 in real estate taxes.
Disaster repairs:
2011 saw a record number of natural disasters strike many areas of our country. As a
result, the IRS is attempting to provide some relief for taxpayers affected by these terrible
events, including extensions of time to file in some instances. Generally you may deduct
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casualty and theft losses relating to your home, household items and vehicles on your
Federal income tax return. You may not deduct casualty and theft losses covered by
insurance unless you file a timely claim for reimbursement, and you must reduce the loss
by the amount of any reimbursement. A casualty loss can result from the damage,
destruction or loss of your property from any sudden, unexpected, or unusual event such
as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does
not include normal wear and tear or progressive deterioration. Individual taxpayers
affected by these events should consult IRS topic 515 and the IRS website at
http://www.irs.gov/newsroom/article/0,,id=108362,00.html for further information.
First Time Homebuyer Credit:
This credit is no longer available, except in very limited circumstances, mostly for
members of the armed services.
Making Work Pay Credit:
This credit has now expired. In its place for 2011 is a reduction to the employee's share
of social security tax that is being deducted from one's paycheck. The tax has been
reduced from 6.2% to 4.2%. This tax savings will be seen on each paycheck similar to
the Making Work Pay Tax Credit.
Unemployment:
While unemployed, individuals can deduct certain job-seeking related expenses,
including the cost of stationary, postage, recruiter fees, as well as child-care expenses in
order to job search.
Should I e-file or use the traditional paper filing method?
The IRS has made available to all individuals Free File, which permits individuals to file their
individual tax returns online for free. Individuals or families with 2011 adjusted gross incomes
of $57,000 or less can use Free File software. Individuals or families with 2011 adjusted gross
incomes of $57,001 or more can use Free File Fillable Forms, the electronic version of IRS paper
forms. Online submission of your tax return permits you to prepare and e-file your form online
at no charge. You may also choose to purchase tax software or have your returns prepared and
filed online by a professional tax preparer. Most professional tax preparers are now required to
submit returns electronically. You will typically receive a confirmation that the IRS has received
your return within 24 hours of its submission. Filing taxes online and paying electronically gets
taxes done more accurately, quickly and efficiently.
In certain instances, you may NOT electronically file your return. If you are subject to any of the
following, or other applicable circumstances, you must file a paper return: you are married and
filing a separate return, and live in a community property state; you claim a dependent that has
not already been claimed; you are using a tax form which is not permitted to be filed
electronically; you are trying to electronically file prior to or after the electronic filing deadline.
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Tips for Filing a Paper Return:
As the use of electronic media continues to grow, the IRS no longer mails out paper tax return
forms. If you would like to file a paper return, you can access copies of the appropriate forms on
the IRS website, stop by your local IRS taxpayer assistance center, or contact your local library
or post office to determine if they have copies of the form. While filing a paper return is simple,
you should keep in mind the following, in order to ensure no additional interest or penalties are
assessed:
1. Mail your return to the appropriate Service Center. Be sure to consult the IRS website if
you are uncertain as to the appropriate address, as the correct Service Center is
determined by your location, the type of return you are filing and whether or not you are
enclosing payment.
2. If money is owed, send your payment with your tax return.
3. Double check all math calculations, and ensure all applicable schedules are included in
your submission package.
4. Be sure your address on the return is correct.
5. Be sure to include your correct social security number on each page.
What to do if I owe money, or if I am owed money?
If you owe taxes, you must pay according to the instructions provided. A timely and full
payment will ensure you do not pay additional interest and penalties on any amount you may
owe. If you cannot pay in full and on time, you should consider applying for an installment
agreement.
If you are owed a refund, the IRS website has a link called “Where's My Refund?” which will
usually have information about your refund 72 hours after IRS acknowledges receipt of your e-
filed return, or three to four weeks after mailing a paper return. Check back weekly, on
Wednesdays, for any updates to your refund information.
You have several options for receiving your federal income tax refund. Your options include:
splitting your refund with direct deposits into two or three checking or savings accounts; direct
depositing your refund into one checking or savings account; receiving your refund as a paper
check in the mail or buy up to $5,000 in US Series I savings bonds. The choice of any of the
direct deposit options listed above will ensure a faster refund, and will ensure the money is
delivered.
What if I can’t file my tax return by April 17, 2012?
If you will be unable to file your tax return by the filing deadline of April 17, 2012, you can file
for an extension of time in which to file. The date for filing for an extension of time to file is
April 17, 2012. However, if on the regular due date of your return, you are out of the country
and a US citizen or resident (including those members of the armed services on duty outside the
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United States or Puerto Rico), you are allowed 2 extra months to file your return and pay any
amount due without requesting an extension. For this calendar year, individuals in these
circumstances would therefore be permitted to file their return up until June 17, 2012 without
requesting an extension. Please be aware that an extension of time to file is NOT an extension of
time to pay, except in very limited circumstances as otherwise set forth in IRS regulations.
In order to request the 6 month extension, you may either: (1) electronically file IRS Form 4868
Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) pay all or
part of your estimate of income tax due using a credit or debit card; or (3) file a paper IRS Form
4868 by mail.
If you file your Form 4868 electronically you will receive an acknowledgement or confirmation
number for your records and you do not need to mail in Form 4868. If you need to pay
additional taxes when filing Form 4868 electronically, you may do so through the outside service
provider or through e-file. You can refer to your tax software or tax professional for ways to file
electronically using e-file services. Several companies offer free filing of Form 4868 through the
Free File program that you can access on the IRS.gov website. If you wish to file electronically,
be sure to have a copy of last year's tax return. You will be asked to provide the Adjusted Gross
Income from the return for taxpayer verification.
A second way of requesting an automatic extension of time to file your individual income tax
return is to pay part or your entire estimate of income tax due by credit card or debit card through
one of the service providers listed on IRS Form 4868. Please be aware that each service provider
may charge a convenience fee based on the amount of the tax payment. At the completion of the
transaction, you should receive a confirmation number for your records.
Finally, you can request an automatic extension of time to file your individual income tax return
by completing paper IRS Form 4868 and mailing it to the appropriate address provided on the
Form.
Although the purpose and scope of this guide cannot set forth every contingency or exception
that may exist, if you are a member of the armed forces serving in a combat zone or in a
contingency operation (or are hospitalized as a result of an injury received while serving in such
an area or operation), you may qualify for certain deadline extensions. The deadlines for filing
tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS are
extended to at least 180 days after you leave the designated combat zone or contingency
operation. Persons in these circumstances should notify the IRS directly of any such request for
combat zone relief for extensions of deadlines through a special e-mail address:
combatzone@irs.govcombatzone@irs.gov.
Getting ready for next year!
Another year of tax forms filed, and already it is time to think about next year? In order to make
next year’s preparation even easier, make a resolution to keep reasonably good records this year.
A simple manila envelope or file folder, in which you deposit all your income, deductible
expenses, gains and losses, and anything affecting your personal tax liability will go a long way
to reducing the stress of preparing your tax returns.
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Income documents generally take the form of W-2s, 1099 and 1098 forms, and any year end
statements from banks or investment companies, including any interest earned on an escrow fund
held by your home mortgage company.
Expense documents should include all of your deductible receipts, bills and invoices for any
expenses you wish to claim including any charitable deductions. Also, with respect to charitable
deductions, keep track of any mileage you travel when volunteering your services, as it is
generally deductible. You should also retain proof of payment of any such bills, which may be
in the form of cancelled checks, bank statements and credit card statements.
Although it may be tempting to shred the documents quickly and forget about tax season, it is
recommended you keep these documents for at least four years, or as long as they are on-going
or relevant, which could be longer.
Relax, and enjoy a few months off before next tax season!
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