2011 Tax Changes


There have been a number of significant tax changes this year that affect family child care providers. All of them are beneficial and they will help reduce your taxes.

For details, see my 2011 Family Child Care Tax Workbook and Organizer.

*  The standard meal allowance rate for 2011 for the 48 states is: $1.19 breakfast, $2.22 lunch/supper and $.66 snack. The 2011 rate for Alaska is $1.89 breakfast, $3.60 lunch/supper and $1.07 snack. The 2011 rate for Hawaii is $1.38 breakfast, $2.60 lunch/supper and $.77 snack. The rates for 2012 for all states increased by over 4%.

* The standard mileage rate for January – June is $.51 per business mile and $.555 for July – December.

* A new 100% bonus depreciation rule allows you to deduct (rather than depreciate) the entire business portion of the following new items in 2011: furniture, appliances, office equipment, and fences. Homes and home improvements are not eligible for this rule.

* The Social Security tax rate on your business profit has dropped 2% to 13.3%.

* If you have improperly treated assistants as independent contractors, the IRS will offer relief from an IRS audit, if you apply for the Voluntary Classification Settlement Program.

* Retirement plan contribution limits for 2011: Regular or Roth IRA $5,000 (plus $1,000 if age 50 or older); SIMPLE IRA $11,500 (plus $2,500 if age 50 or older); SEP IRA 18.58% of profit.

* Saver’s Tax Credit eligibility limits: $56,500 married filing jointly; $28,250 single.

* The federal unemployment tax rate has dropped to .6% after June 30, 2011.

I’ve created a handout of this article that you can use in training workshops.

Image credit: ehow.co.uk

2011 Tax Workbook smallFor more information, see my book 2011 Family Child Care Tax Workbook and Organizer.




Copyright 2011 Tom Copeland, www.tomcopelandblog.com

Categories: Deductions, Record Keeping & Taxes

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