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Big tax mines that could blow up your return

Missing these tax changes could bring some IRS attention, hefty penalties
 
Congress’s relative gridlock last year means there aren’t a slew of complex tax changes to deal with when you file this year — but there are some doozies that may trip up taxpayer

New cost-basis reporting rules may trip up investors when they go to report their capital gains and losses, come tax time.
 
For instance, thanks to a law passed in 2008, investors now face new rules and a new form for reporting cost basis for stocks sold in 2011.

What You Need to Know for Your 2011 Tax Filing and What’s New for 2012

Tax season is here again! While the filing deadline might be a couple of months away, this month you will receive all required third-party reporting documents: W2s, 1099s for interest and dividends, 1099s for nonemployee compensation if you are an independent contractor, 1099-Bs from your broker reporting proceeds from the sale of stocks and bonds, 1098s from your mortgage holder, K-1s from partnerships, S Corps, estates, and trusts. Hopefully, you’ve set up a file to store all these documents to make data gathering for tax preparation a snap.

How to Dodge Last-Minute Tax Traps

The holidays are here and everything important is done, right?
 
Well, maybe not everything. Some will find themselves racing next week to meet year-end tax deadlines to make charitable gifts, plan taxes on investments and make annual gifts to others.
 
If you are one of them, don't overlook important details. The Internal Revenue Service certainly won't. And remember the underlying principle behind whether a tax move counts for 2011: It can't be undone.
 
Here, then, are some last-minute tips.

Biggest Tax Stories of 2011

There was not a ton of tax news this year, due to a welcome lack of legislation. So for one year in a row, the Internal Revenue Code was not a constantly moving target. Thank you Congress. Still, there were two significant developments and one significant non-development. Here, in my opinion, are the three biggest tax stories for 2011.
1. No Grand Tax Compromise
Earlier this year, when it became obvious to even the most jaded observers that the federal debt load had reached and exceeded the point of extreme scariness, it looked as if "tax reform" combined with "spending cuts" might be combined in a "grand compromise.

Year-end tax tips to maximize your money

Good year for gifting
But there is some uncertainty around estate planning, Duggan said. Here’s why: When the congressional supercommittee in November was working to cut the government’s deficit, rumors swirled that the committee would slash the current $5 million lifetime gift-tax exclusion, currently in place through 2012. While the supercommittee failed to come to agreement, the possibility lingers that lawmakers might tinker with that exemption in 2012. That means high-net-worth taxpayers who haven’t yet devised estate plans to maximize that benefit should act sooner rather than later.

Check If You're Missing a Refund

 
Internal Revenue Service officials are hunting for nearly 100,000 people. But for a change, those people should be hoping the IRS finds them.
 
The government isn't trying to squeeze more taxes out of this missing group. It's the other way around: The IRS is trying to return more than $153 million in undelivered tax-refund checks, which couldn't be delivered because of mailing-address errors. The checks average $1,547 apiece.
 
This is a perennial problem—and one that can easily be avoided.

Age-Related Tax Milestones

Age-Related Tax Milestones
 
Bischoff: A primer on what to watch for when your calendar turns.
 
Written ByBILL BISCHOFF
 
Across economic cycles, two things remain constant: you get older and you pay taxes. As the new year turns, you should also turn to your own age-related tax and financial planning milestones.Age 0-23: Beware the Kiddie TaxUnder the Kiddie Tax rules, part of a young person's investment income can be taxed at the parent's federal rate. This means investment income for a young person, which would be taxed anywhere from 0% to 10% to 15%, could be taxed at rates up to 35%.
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Recent Posts

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Big tax mines that could blow up your return
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What You Need to Know for Your 2011 Tax Filing and What’s New for 2012
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