Rates stay same, but personal exemptions rise

In the tax preparation industry, some of the numbers have changed for this year's filing season, but most of the underlying fundamentals of the system remain intact.

Photo by Brad Nettles

IRS field assistant Domingo Murguia (right) helps a customer last week at the federal agency’s Poston Road office in Charleston.

What to bring along

--Proof of identification.

--Social Security cards for you, your spouse and dependents, and/or a Social Security number verification letter from the Social Security Administration.

--Birth dates for you, your spouse and dependents on the tax return.

--Wage and earning statements (IRS forms W-2, W-2G or 1099-R) from all employers.

--Interest and dividend statements from banks (IRS forms 1099).

--A copy of last year's federal and state returns if available.

--Proof of bank account routing numbers and account numbers for direct deposit, such as a blank check.

--Total paid for day care and the day-care provider's tax identifying number (the provider's Social Security number or the provider's business employer ID Number).

--To file taxes electronically on a married-filing-joint tax return, both spouses must be present to sign the required forms.

Rates are the same as in the 2010 tax year, ranging from a low of 10 percent to a high of 35 percent. The lower long-term capital gains rates of 0 percent and 15 percent are good through the end of this year. And credits for adopting a child and for college expenses continue.

But taxpayers who itemize this year will benefit from an increase in the personal exemption figure. And the standard deduction, available to those who don't itemize, also rose. (See the "Tax facts & figures" box.)

Will Russell, a certified public accountant and principal with the Charleston-based Jarrard Nowell & Russell, said one of the most significant changes this season affects taxpayers who hire a preparer, though most will hardly notice the difference.

"E-filing is mandatory," Russell said, referring to returns that are zapped electronically to the government. "There is an opt-out provision, but otherwise it's mandatory."

Electronically filed returns tend to have fewer errors, and give the taxpayer the convenience of filing at any time, day or night, without having to wait at the post office. They also can mean quicker refunds, particularly if the money is deposited automatically in a bank account.

The one tax break that almost every worker got last year, regardless of income, was the 2 percentage point reduction in Social Security payroll taxes. And there was nothing to file to get the extra take-home pay.

"The savings were immediate," said Jeff Schnepper, author of "How to Pay Zero Taxes."

Congress passed a two-month extension of the Social Security tax cut just days be-

fore it was to expire at the end of 2011. It said it would negotiate to keep it in place for the full year.

As always, taxpayer should be sure to take all the deductions and credits for which they're eligible.

For example, taxpayers who spent money making their homes more energy efficient, such as installing insulation, new windows or water heaters, can get up to a $500 credit. The credit for installing solar, wind or other alternative energy equipment is 30 percent of the cost.

There's also some tax relief for people who lost property or suffered damages in hurricanes, wildfires, tornadoes and other natural disasters in 2011. Losses over and above what was covered by insurance may be deductible if they exceed 10 percent of adjusted gross income.

And because of adjustments to items such as the standard deduction and personal exemption, some of the breaks that filers "didn't quality for last year, they may qualify this year, especially if they didn't get a raise," said Barbara Weltman, contributing editor to J.K. Lasser's "Your Income Tax 2012."

Reader poll

If you are expecting a tax refund this year, will you save it or spend it?

Save it 37% 64 votes
Spend it 32% 55 votes
I am not expecting a tax refund this year 30% 51 votes

170 total votes.

Unemployment benefits are taxable, and recipients who did not have money automatically withheld last year could face a higher tax liability when they file their returns this year.

On a positive note, filers who don't request an extension have two extra days to get their 2011 income information together and send it off.

April 17 is the deadline for both state and federal filings this year because of Washington, D.C.'s recognition of Emancipation Day (April 16) as a holiday.

And for those who owe taxes but don't have the money to pay by that day?

IRS spokesman Terry Lemons said the agency has a "safety net for struggling taxpayers," including installment agreements and other options.

"You should really go ahead and file your tax return even if you can't pay," he said. "If you can't pay us, contact us."

Tax facts and figures

Some key numbers to know when filing your 2011 tax returns, according to the Internal Revenue Service:

Personal exemption

Each personal or dependent exemption is $3,700.

Standard deduction

$11,600 for married couples filing a joint return, and qualifying widows and widowers.

Distinction

One confusing part of the tax code is the difference between credits and deductions:

-- Credits: They directly reduce the income tax you owe.

-- Deductions: They reduce the amount of income used to compute your taxes.

$5,800 for singles and married individuals filing separate returns.

$8,500 for heads of household.

Taxpayers 65 or older or who are blind may be eligible for a higher amount.

Earned income-tax credit

To qualify, income can be no greater than:

$43,998 ($49,078 married filing jointly) with three or more qualifying children. Maximum credit is $5,751

$40,964 ($46,044 married filing jointly) with two qualifying children. Maximum is $5,112.

$36,052 ($41,132 married filing jointly) with one qualifying child. Maximum is $3,094.

$13,660 ($18,740 married filing jointly) with no qualifying children. Maximum is $464.

Capital gains

0% if taxed in the 10% or 15% brackets. Top rate of 15% if taxed in higher brackets.

Standard mileage rates

Business use

51 cents a mile, Jan. 1-June 30

55.5 cents, July 1-Dec. 31

Medical reasons or qualified move

19 cents, Jan. 1-June 30

23.5 cents, July 1-Dec. 31

Charitable purposes

14 cents

In need of assistance? IRS help AARP help

Free help is available at The Internal Revenue Service local office at 1 Poston Rd. off Sam Rittenberg Boulevard in West Ashley. The service is limited to individuals or households with less than $50,000 a year in income. It's open 8:30 a.m.-4:30 p.m. on weekdays. Call 566-0209 for more information. IRS spokesman Mark Hanson said those seeking help needs to have all of their paperwork ready.

Also, the Internal Revenue Service's Volunteer Income Tax Assistance Program assists taxpayers with low- to-moderate income with their returns for free. Here is partial listing of help sites.

Berkeley United Way Center: 325 E. Main St., Moncks Corner. Saturdays, through April 14; 9 a.m.-noon.

Charleston County Human Services: Sites in Charleston. North Charleston, St. George and Summerville, Jan. 30-April 17. By appointment. Call 720-3718 for days, times and locations.

Charleston County Public Library: 68 Calhoun St., Charleston. Tuesdays, Jan. 24-April 10, 9:30 a.m.-noon. Thursdays, Jan. 26-April 12, 9:30 a.m.-noon. Saturdays, Jan. 28-April 14, 9 a.m.-1 p.m.

Charleston Trident Urban League: 729 Easy Bay St., Charleston. Weekdays. 9 a.m.-4 p.m. By appointment. Call 965-4037.

Citadel Mall: 2070 Sam Rittenberg Blvd., Charleston. Saturdays, Feb. 4-April 14; 10 a.m.-2 p.m.

College of Charleston: 5 Liberty St., Charleston. Saturdays, Jan. 28-April 14; 10 a.m.-2 p.m.

Cooper River Library: 3503 Rivers Ave., North Charleston. Saturdays, Jan. 28-April 14; 10 a.m.-2 p.m.

Cross Community Center: 1690 Old Highway 6, Cross. Tuesdays and Thursdays, through April 17; 6-8 p.m. By appointment. Call 803-533-6371, ext. 7533.

East Cooper Community Outreach: 1145 Six Mile Rd., Mount Pleasant. Thursdays, Jan. 26-April 12; 5-7 p.m. By appointment. Call 849-9220. Fridays, Jan. 27-April 13; 8:30 a.m.-12:30 p.m.

Family Services: 4925 Lacross Road, North Charleston. Tuesdays through Thursdays, Jan. 24-April 12. By appointment. Call 735-5522.

Goodwill Industries: 2150 Eagle Dr., North Charleston. Mondays through Wednesdays, Jan. 23-April 11; 10 a.m.-2 p.m. Call 566-0072.

Heritage Trust: 1129 Park West Blvd., Mount Pleasant. Wednesdays, Feb. 1-April 11. 3-8 p.m. By appointment. Call 486-1210.

Increasing HOPE: 2154 N. Center St., North Charleston. Tuesdays, Thursdays, Saturdays and Sundays, through April 15. By appointment. Call 225-4343.

James Island Library: 1248 Camp Road Wednesdays, Feb. 1-April 11; 5-7:30 p.m.

Mount Horr AME Church: 4630 Highway 174, Yonges Island. Tuesday and Thursdays, Jan. 24-April 12; 9:30 a.m.-noon.

Mount Pleasant Regional Library: 1133 Mathis Ferry Rd. Saturdays, Jan. 28-April 14, 10 a.m.-1 p.m.

Northwoods Mall: 2150 Northwoods Blvd., North Charleston. Saturdays; Jan. 28-April 14; 10 a.m.-2 p.m.

Trident United Way Center: 117 S. Main St., Summerville. Saturdays, Feb. 4-April 14; 10 a.m.-2 p.m

Summerville Branch Library: 76 Old

Trolley Road, Summerville. Saturdays, Feb. 4-April 14; 10 a.m.-4 p.m.; Mondays. Feb. 6- April 16; 10 a.m.-7 p.m.

Free tax assistance will be offered by AARP volunteers at various sites through April. Senior citizens will be given preference.

Here is a list of confirmed sites by day.

Monday

--Charleston County Public Library, 68 Calhoun St., Charleston. 9:30 a.m.-1:30 p.m. Feb. 6-April 16.

--Dorchester Road Regional Library, 6325 Dorchester Road, North Charleston. 10:30 a.m.-2:30 p.m. Feb. 6-April 9.

--McClellanville Library, 22 Baker St., McClellanville. 9:30 a.m-2 p.m. March 12 and March 26. By appointment. Call 887-3699.

Wednesday

--Farmers & Merchants Bank, 221 E. Main St., Moncks Corner. 9 a.m.-3 p.m. By appointment. Call 761-0390.

Thursday

--Goose Creek Library, 325 Old Moncks Corner Road, Goose Creek. 9:30 a.m.-12:30 p.m. By appointment. Call 270-7881.

--Otranto Road Regional, 2261 Otranto Road, North Charleston. 10 a.m.-2 p.m. Feb. 2-April 12.

Friday

--St. Andrews Regional Library, 1735 N. Woodmere Dr., Charleston. 10 a.m.-2 p.m. Feb. 3-April 13.

Saturday

--John's Island Regional Library, 3531 Maybank Hwy. 10 a.m.-2 p.m. Feb. 4-April 14.

The Associated Press and The Post and Courier contributed to this report.