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(678) 213-1141
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  • Things to Bring for Tax Preparation
  • Most Overlooked Deductions
  • Top 10 Overlooked Credits
  • Recent Tax Law Changes
  • Business Structure Information
  • Itemized Deductions 


  • Recent Tax Law Changes

    Select an item from the list below:

  • IRA Contributions
  • Elective Deferrals
  • Marraige Penalty Relief
  • IRA Deduction Phaseout
  • Investment Income
  • Education Credit
  • Qualified Adoption Expenses
  • Social Security & SE base
  • Child Tax Credit
  • Amounts Subject to Social Security and Medicare Tax
  • Income Tax Rates
  • Expired Tax Benefits
  • Earned Income Credit
  • New earned income credit amounts
  • E-file ruling for corporations
  • Child & Dependent Care (Daycare)
  • New Standard Deduction
  • Capital Gains and Dividends
  • New exemption amount
  • Deductible Mileage
  • Health Insurance Deduction for Self-employed

  • IRA Contributions
    The maximum contribution amount for tax year 2011 is $5,000.  The maximum contribution amount remains $4,000 for tax-years 2006 and 2007. The catch-up contribution increases to $1,000 (from $500) for tax-year 2006 and later years. Therefore, taxpayers age 50 and older can contribute up to $6,000 (from $5,000). The maximum contribution amount is $5,000 for tax years after December 31, 2007 (indexed for inflation after tax-year 2008).
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    Elective Deferrals

    The maximum deferral to 401(k) plans, 403(b) annuities, 457 deferrals, and salary reduction SEPs increases to $16,500 (from $15,500). The maximum contribution to a SIMPLE plan remains $10,000. 2011 catch up contributions for taxpayers 50 and over.
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    IRA Deduction Phaseout
    If a taxpayer is covered by a retirement plan at work, their IRA deductions may be limited if the AGI on Form 1040 is:

    • $89,000-$109,000 - married filing jointly or qualifying widow(er) (from $85,000-$105,000)
    • $56,000-$66,000 - single or head of household
    • $0-$10,000 - married filing separately (remains the same)

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    Investment Income
    If the taxpayer's investment income is over $3,100 (from $2,950), the taxpayer is not eligible for the Earned Income Credit.
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    Education Credit
    The maximum Hope Credit increases to $2,500 per eligible student. The maximum Lifetime Learning Credit remains $2,000 per tax return. The phase-out range for the Lifetime Learning Credits is $100,000 - $120,000 if married filing jointly and $50,000 - $60,000 for all other filing statuses. The phase-out range for the Hope credit is $160,000 - $180,000 and $80,000 - $90,000 for all other filing statuses.
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    Qualified Adoption Expenses
    The credit increases to $13,360 (from $13,170) for qualifying adoption expenses. A credit of $13,360 is allowed for a special needs child regardless of the amount of qualifying expenses. The credit for a special needs child is allowed for the year in which the adoption becomes final. No credit for a special needs child is allowed until the adoption becomes final. The phaseout range increases to $182,210 to $222,510 of modified adjusted gross income.
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    Social Security & Medicare Wage base
    $106,800 for Social Security.
    Medicare Wage Base: No Ceiling
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    Child Tax Credit
    2011 Tax Year Child Tax Credit amount will remain at $1000.00 per child under age 17 (www.irs.gov).  Refundable to extent 10% of taxpayer’s earned income in excess of $3,000 up to the per child credit amount, if total tax liability, minus nonrefundable credits taken.
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    Income Tax Rates
    The income tax rates remain 10%, 15%, 25%, 28%, 33%, and 35%.
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    Earned Income Credit
    IRS will disallow EIC if Federal Case Registry of child Support Orders shows that taxpayer is the non-custodial parent of a child claimed as a qualifying child for EIC.
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    Earned Income Credit Amounts Increase
    The following paragraphs explain the changes to the credit for 2008.

    Amount of credit increased. The maximum amount of the credit has increased. The most you can get is:

    • $3,094 if you have one qualifying child,
    • $5,112 if you have more than one qualifying child
    • $5,751 if you have more than two qualifying children, or
    • $464 if you do not have a qualifying child.

    Earned income amount increased.
    The maximum amount of income you can earn and still get the credit has increased for 2008. You may be able to take the credit if:
  •  
    • You have more than one qualifying child and you earn less than $35,535 ($40,545 if married filing jointly),
    • You have two qualifying children and you earn less than $40,363 ($45,373 if married filing jointly)
    • You have three qualifying children and you earn less than $43,350 ($48,362), or
    • You do not have a qualifying child and you earn less than $13,450 ($18,470 if married filing jointly).

    The maximum amount of adjusted gross income (AGI) you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

    No of Children Max Credit Maximum Income MFJ
    0 $4,64 $13,649 $18,739
    1 $3,094 $36,049 $41,131
    2 $5,112 $40,963 $46,046
    3 $5,751 $43,997 $49,077

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    E-file ruling for corporations
    E-file and preparation of Forms 1120 and 1120S corporate returns are due by March 15th.
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    Child & Dependent Care (Daycare)
    *Amount is 35% of total qualifying expenses
    *Minimum Income is $15,000
    *Max AGE is $15,000, up from $10,000*Daycare credit is given for children under age 13
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    New Standard Deduction
    New Standard Deduction
    Filing Status 2011 2010 2009
    Single $5,800 $5,350 $5,700
    Head of Household $8,400 $8,350 $8,400
    Married Filing Joint $11,600 $11,400 $11,400
    Widow w/ Dependent $11,600 $11,400 $11,400
    Married Filing Separate $5,800 $5,800 $5,800

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    Capital Gains and Dividends
    Unlike ordinary income, long-term capital gains and qualified dividends are taxed at no more than 15% through 2010.
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    New exemption amount New exemption amount

    2009 2010 2011
    $3,650 $3,700 $3,700

    The above amounts apply to each individual on tax return Back to Top


    Deductible Mileage
    Year Business Mail Carrier Charity & Volunteer Medical & Moving
    2006 0.375 0.4725 0.14 0.124
    2007 0.485 0.4725 0.14 0.20
    2008
    (1/1-6/30)
    0.505 0.4725 0.14 0.19
    2008
    (7/1 - 12/31)
    0.585 0.4725 0.14 0.27
    2009 0.55 0.4725 0.14 -
    2010 0.50 0.4725 0.14 16.5
    2011 (1/1 - 6/30) 0.51 0.4725 0.14 19.0
    2011 (7/1 - 12/31) 0.555 0.4725 0.14 23.5

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    Health Insurance Deduction for Self-employed
    For 2008, 100% of amount paid for medical insurance for taxpayer and family.
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    Foreign Earned Income Inclusion
    For 2011, The maximum has increased to $92,900.
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