MARCH 2011
Khaas Baat : A Publication for Indian Americans in Florida
Accounting

Tax Filing News from the IRS

By Kamlesh H. Patel, CPA

Here are some recent IRS actions and news releases that may affect you or your business.


Some deductions can be taken even if you don’t itemize

You’re probably familiar with the deduction choice you must make when you file your tax return. You either have enough deductions (such as mortgage interest, charitable contributions and medical expenses) to itemize, or you take the standard deduction, a set amount that doesn’t require you to list specific deductible items.

What you may not be as familiar with are those deductions that you are allowed to take above the line; that is, deductions that you can take in addition to your itemized deductions or your standard deduction.

Here’s a quick rundown of above-the-line deductions you shouldn’t miss on your 2010 tax return.

Most of these deductions have qualification requirements or income limitations. Don’t overlook above-the-line tax deductions. An added benefit: These deductions decrease your adjusted gross income, an important number on your tax return. The lower your adjusted gross income, the more likely you are to qualify for credits and deductions subject to income thresholds.

Kamlesh H. Patel, CPA, can be reached at (813) 949-8889 or e-mail kpaccounting@verizon.net or kpinsurance@verizon.net.


Finance

CONTRIBUTION LIMITS FOR 2011

By Seema Ramroop

Its now 2011 and we are all planning ahead. The contribution table for 2011 below is for your review. Though we don’t offer tax advice, this table has proven to be quite useful and can perhaps help you with some planning throughout this year.


 

 

 

Limitation

2011

IRAs

$5,000

Catch-up Contributions for IRAs

$1,000

401(k)/403(b)/SAR-SEP IRA Elective Deferral

$16,500

Catch-up Contributions for 401(k)/403(b)/Government 457(b) Plans and SAR-SEP IRAs

$5,500

Defined Benefit Plans

$195,000

Defined Contribution Plans and SEP IRAs

$49,000

Annual Compensation Limits

$245,000

457(b) Plans

$16,500

Highly Compensated*

$110,000

SIMPLE IRAs

$11,500

Catch-up Contributions for SIMPLE IRAs

$2,500

Key Employee Officer Threshold

$160,000

SEP Minimum Compensation

$550

Income Subject to Social Security

$106,800


*Note: Maximum HCE compensation utilizes prior year limits.

Seema Ramroop, financial advisor, Morgan Stanley Smith Barney, can be reached at seeseema.ramroop@mssb.com or call (727) 773-4629.

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