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.

Volunteer Work

When you work for a charity you can deduct your out of pocket costs like mileage and postage. However,  you can't deduct the value of your time or services.

Spousal Social Security Benefits

The best way to maximize spousal benefits is to have the higher earning spouse wait to age 70 to apply for benefits and have the other spouse apply at say age 66 under their account. The lower earning spouse will get 100% of their benefit assuming full retirement age at 66 and then can switch to receiving 50% of the higher earning spouse when that spouse applies for benefits at age 70 assuming that amount is higher. Your family can then end up  with a max of 150% of the higher earning spouse's benefit. If your spouse dies, you can apply for 100% of their benefit as early as age 60. You can receive benefits based on an ex spouse's record if you are unmarried and were married to the ex spouse for at least 10 years.

Buy that New Truck!

New trucks, vans and SUVs with loaded gross vehicle weight in excess of 6,000 pounds bought for a business can qualify for 100% bonus depreciation based on 100% business use. This bonus depreciation applies to new qualified assets placed in service from September 9, 2010 through December 31, 2011. Note that it expires at the end of this year so act now.