Due Date of 2011 Individual Tax Returns

The due date for filing  individual income tax returns has been changed to Tuesday April 17th since there is a Washington DC holiday on the 16th.

Reporting on Stock Sales

For the first time, brokers will be required to report the customer's adjusted basis in stocks and bonds purchased after 2010 and whether or not the gain or loss is short-term or long-term for security sales. Before they only had to report the gross proceeds of the sales. This requirement doesn't cover mutual funds and stock acquired through reinvestment plans until after 2011.

Form 1099-K

Beginning for tax year 2011, banks that process credit cards and third party networks like paypal have to report payments to recipients on new form 1099-K, Merchant Card and Third Party Network Payments. The 2011 tax forms have line items on Schedules C, E, and F where the information from the 1099-K is to be reported. However, the IRS backed off of requiring compliance for 2011 due to possible problems with this new form.  I bet the reporting will fully be in place for 2012.

Foreign Financial Asset Reporting

2011 is the first year that information on foreign contracts, foreign financial accounts, or stocks issued by a foreigner has to be attached to your income tax return. If the foreign assets exceed $100,000 on a joint return or $50,000 on a single return on 12/31/11, the information on the assets has to be reported on form 8938, Statement of Specified Foreign Financial Assets. There is a $10,000 penalty if you don't comply.

Cash or Check Donations of $250 or More

In order to deduct a donation of $250 or more, you have to get a written acknowledgement from the charity. This can be an email, and it does not have to be attached to the tax return. Charities are required to give you a written acknowledgement for any donations of $250 or more given at one time. A cancelled check is not good enough for the IRS. Protect yourself by getting those acknowledgements.

Medicare

Medicare comes in the following 4 parts:
Part A: This is hospital insurance and covers inpatient hospital care, hospice and home health care.
Part B: Outpatient care and doctor services are included here under medical insurance. Individuals pay a monthly premium each month for this coverage starting at $96.40.
Part C: This covers medicare advantage plans provided by private companies which provide additional coverage such as vision, dental and hearing programs.
Part D: This is the prescription drug option run by private insurance companies.

The one thing that medicare doesn't cover that can end up costing a huge amount of money is long term care like at a nursing home or assisted living facility.

Applying for Social Security and Medicare

You should apply for social security benefits 4 months before you want to start the benefits. You should apply for medicare 3 months before the month you turn 65. There is a penalty of 10% of the cost of medicare part B for each year you delay enrolling.