What All Tax Provisions Are New for the Year 2011?

Most of us consider ourselves veterans when it comes to filing tax returns. But even veterans need to keep themselves updated on the current and latest provisions of the Internal Revenue Service department. Based on government policies of state of affair of the economy certain changes are prescribed in the tax provisions to maintain the equilibrium in real income of taxpayers. We all need to keep ourselves updated with these changes in order to take advantage of them and file correct income tax returns. Let us further study few main changes that would be applicable in year 2011.Change in provisions related to Income Tax Preparers: Each year hundreds and thousands of taxpayers use services of income tax preparers for preparing and filing their income tax returns. It is very important to control these preparers so that taxpayers can be assured of their ability to help them. For this in 2011 all the tax preparers must be registered under the new scheme of Internal Revenue Service (IRS) department and must obtain new TPINs. Only the preparers with new TPIN are authorized to file income tax returns on behalf of their clients. Also Tax preparers will only be authorized to file returns online. From 2011 onwards tax preparers cannot file paper returns.Obsolete Debt Indicator Discontinued: Debt indicator tool was primarily used for finding out the tax refunds. Now with majority of taxpayers using the e-file system to submit their tax returns the very purpose of Debt Indicator is defeated. While filing tax returns electronically you receive your tax refunds within 8-10 of processing your return by IRS, so there is actually no need for a Debt Indicator tool now. Year 2011 wishes good bye to Debt indicator.Extension of First Time Home Buyer Credit scheme: The credits under First time home buyer scheme can still be availed by eligible taxpayers. According to the new deadline of September 20th 2010 if you have finalized you biding contract for you home you can claim for credits while filing your return in year 2011.Introduction of New Tax Form: New Tax forms and statements are introduced in year 2011. Now if you have business purchases beyond $600 you will need to fill Form 1099. Also IRS has instructed all the companies involved in credit or debit card business to send year end statements to all its clients showing details of yearly transaction. This is done with a purpose to crack down on people those who do not report their full income.

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