Tax benefits to increase in 2011

Link
Posted by Andrew Chan
December 29, 2010 10:00 AM
The IRS announced last week that several key tax provisions for 2011 will increase to adjust for inflation. These provisions were either modified or extended as part of the new Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that President Obama signed on December 17. These new amounts will affect taxpayers on their 2011 tax returns (which are filed in 2012).

The specific changes will be are as follows:

* The personal and dependent exemption amount per person will increase to $3,700.

* The standard deduction amounts will increase to:
• $11,600 for married couples filing a joint return
• $5,800 for singles and married individuals filing separately
• $8,500 for heads of household

- The additional standard deduction for blind people and senior citizens will increase to:
• $1,150 for married individuals, and
• $1,450 for singles and heads of household.

- The maximum earned income tax credit (EITC) will increase to $5,751 and the maximum income limit for the EITC will increase to $49,078.

- The modified adjusted gross income phase-out for the Lifetime Learning Credit begins at $102,000 for joint filers and $51,000 for singles and heads of household.

Although the 2011 tax tables have not yet been released, tax-bracket thresholds will increase for each filing status. For example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket for a married couple filing a joint return will increase by $1,000 to $69,000.
http://www.boston.com/business/personalfinance/managingyourmoney/archives/2010/12/tax_benefits_to.html