If you have questions about this section, please contact us. This information is general, and it may be difficult to determine how it applies to your specific situation.

SOCIAL SECURITY: The taxable wage limit of the FICA portion of Social Security has remained the same for 2011 at $106,800. In 2012 it will increase to $110,100. As in the past, the Medicare portion has no wage limit.

RETIREMENT CONTRIBUTIONS: The maximum amount an employee can contribute to a 401k will increase from $16,500 in 2011 to $17,000 in 2012. For individuals over the age of 50, their catch-up contribution will remain unchanged at $5,500. If you are 50 years of age or older you will be able to defer a total of $22,000 for 2011 or $22,500 for 2012. IRAs and Roth IRAs contribution limits for 2012 is the smaller of $5,000 or the amount of your taxable compensation for 2012, and the "catch-up" provisions for folks 50 years of age or older will be the smaller of $6,000 or the amount of your taxable compensation for 2012.

CHARITABLE CONTRIBUTIONS:

Cash donations need a receipt
All cash donation must have a receipt to be tax deductible, regardless of dollar amount donated. You can still donate cash in any amount to religious and other charitable organizations, but you need a receipt from the organization if you want the donation to be deductible on your tax return. IRS will no longer "take your word for it."

For donations via payroll deductions, your final pay stub of the year and a copy of the pledge card showing the name of the charity and amount pledged will suffice. Donations by check or credit card will have a cancelled check or credit card receipt or bill to verify the amount and organization, as they always have. Items charged on a credit card are considered to be donated on the date of the charge, not when the credit card bill is paid.

For any single donation of $250 or more, whether money or property, you will be required to have s a written acknowledgment of your contribution from the qualified organization to be tax deductible. The acknowledgment should not be attached to your tax return, but must be in your possession by the time you file the tax return that claims that deduction.

Clothing and household items must be in good condition

All clothing and household items donated to charities must be in good used condition or better for it to qualify as a charitable contribution. IRS has not offered any guidelines yet as to what or who determines the condition of the item. It has been suggested that you may want to keep photographs of the items if you are donating a lot of your used possessions. Furniture, furnishing, electronics, appliances and linens are included. One exception is that you may claim a deduction of more than $500 for any single item, regardless of condition, if you attach a qualified appraisal of the item to your tax return. Donations of personal property valued above $500 for the whole year will require the completion of a special tax form giving details to the IRS, as in the past.

Automobile donations
The number of car donation programs has increased considerably. As a taxpayer it is important to understand your obligations under tax law for donating an automobile. Publication 4303, A Donor's Guide to Car Donations, helps the taxpayer through the donation process with reminders that they need to ensure that the charity is qualified, that they receive a written acknowledgement from the charity and to keep records and to properly assess the fair market value of their vehicle. Publication 4303 can be found at http://www.irs.gov/pub/irs-tege/pub4303.pdf.

MILEAGE ALLOWANCE:
The IRS standard mileage allowances for January 1, 2011 to June 30, 2011 are 51 cents per mile for business, 14 cents per mile for charitable and 19 cents per mile for medical and moving. For July 1, 2011 to December 31, 2011 the standard mileage allowances are 55.5 cents per mile for business, 14 cents per mile for charitable and 23.5 cents per mile for medical and moving. As always, you need to be able to substantiate the miles driven for business purposes.

Beginning January 1, 2012, the standard mileage rates will be 55.5 cents per mile for business, 14 cents per mile for charitable and 23 cents per mile driven for medical or moving purposes.

EXTENSIONS:
If you are an individual, partnership or trust and need an extension, you will now receive a six month extension for a new deadline of October 15. Remember, this does not extend the time to pay your taxes, just to file the return. Taxes are still due in April when the extension is submitted.