2011 Offshore Voluntary Disclosure Initiative

The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011.
The 2011 initiative has a higher penalty rate than the IRS’s previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and possible criminal prosecution. In addition, the 2011 initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations.
The following information Forms are required along with original tax return or amended tax return:
1. Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as an “FBAR”).
2. Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.
3. Form 3520-A, Information Return of Foreign Trust With a U.S. Owner.
4. Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations.
5. Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
6. Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation.
7. Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships.

Estate Exclusion Amount For 2010, 2011 and 2012

In 2011 and 2012 and estate tax exclusion amount is 5 million and the estate tax rate is 35%. The basis of inherited property is stepped-up basis.

For 2010, estates have two choices, either pay no estate tax or pay 35% estate tax on assets over 5 million.
(a) If you inherit property in 2010 from a estate that chose to avail unlimited estate tax exemption, the basis of inherited property remains the same as it was for the deceased owner. Your cost basis is not "step-up" but it is the "carry-over". However, you can choose to take your cost basis as "step-up" for only $1.3 million of the property. For any amount inherited over $1.3 million, your cost basis will be the smaller of the deceased owner's basis or the FMV on the date of the death. the surviving spouse will receive an additional $3 million basis "step-up".
(b) If you inherit property in 2010 from a estate that is over 5 million and that paid 35% estate tax on assets over 5 million, you can claim stepped-up basis.

Making Work Pay Credit

Taxpayers with earned income will get Making Work Pay credit on their 2010 tax return. It is 6.2% of your earned income with a maximum of $400 ($800 if married filing jointly). You must file schedule M (Form 1040 or 1040A) to claim the credit. Include the credit on line 63 of Form 1040 or line 40 of Form 1040A. If you are filing Form 1040-EZ, include the credit on line 8 and do not file schedule M. Those with AGI of more than $95,000 ($190,000 if married filing jointly), nonresidents and dependents do not get this credit.

Standard Mileage Rates For 2010

For 2010, the standard mileage rate for the cost of operating your car for business use is 50 cents a mile, for medical reasons is 16½ cents a mile for the cost of operating your car for determining moving expenses is 16½ cents a mile.

Due Date For 2010 Individual Tax Return

File individual taxpayers the due date for 2010 tax return is April 18, 2011 instead of April 15, 2011.