First time homebuyer Credit 2011 is one of a very hot new changes that have been introduced in year 2011. If you qualify for this valuable credit, it can be a very big deal in saving you thousands of dollars in tax.

So, now the question arises that who is qualified to claim first-time home buyer credit in year 2011 tax returns. Well, here we go:

- To claim the credit, you have to serve on extended duty outside the United States for at least 90 days. Remember, this duty has to occur after December 31, 2008 and end before May 1, 2010.

-You have to purchase your home before May 1, 2011. If you enter into a binding agreement before May 1st and eventually purchase the property before July 1st, you

do qualify for the First Time Homebuyer Credit."

- If you build a house, its ok if you make commitment before May 1st 2011 and move in prior to July 1st. (oh! by the way check my article on how to select best tax preparation software for 2011)

- The First Time Homebuyer Credit puts another condition that the main home has to be in the United States. Partial credit is awarded if the house is a duplex or its a house with a detached building used for business purposes. Its okay if "House" is a houseboat, mobile home, cooperative apartment or condominium.

- The taxpayer can't make more than $125,000 or $245,000(married filing jointly). The deduction phases out at $145,000 or $245,000(married filing jointly).

- Another condition is that the home cannot cost more than $800,000.

- The taxpayer and the spouse both have to be first-time homebuyers. This means that you are not allowed to own a home for the three years before you buy this time.

- You are not eligible for first time homebuyer credit if you are:

      under 18 years of age,

      nonresident alien,

      dependent on someone's tax return,

      house is inheritance & is bought from a relative or  from business you own more than half.

Now, the question is what is the amount of Credit:

10% of purchase price of the home, but a maximum upto $8,000 when you file jointly.

So, go ahead & take advantage of the First Time Homebuyer Credit 2011. Remember, it requires you to get into a binding agreement on a house prior to May 1, 2011. All the best for a big refund!!

To qualify for the child and dependent care credit, you must have a dependent child age 12 or younger, or a dependent of any age who cannot care for himself or herself.

Prerequisites to claim this tax credit: For claiming the child & dependent care credit, you must meet each of following criteria:

• Your daycare provider must meet certain qualifications,
• Your child or dependent must meet certain qualifications,
• You must have earned income,
• With the care provided, you must be able to work or to look for work, and
• You must reduce your eligible daycare expenses by any amount/s provided by a dependent care benefits plan sponsored by your employer.

Now, who is the "Qualifying Child or Dependent"

For the child to be "qualifying", he/she must be your dependent, age 12 or younger. If your child is age 13 or older, the child must be physically or mentally unable to care for himself/herself. You can also claim adult daycare expenses for a dependent age 13 or older/for a spouse, if that person is physically or mentally unable to care for himself/ herself. Other qualifying criteria include that you must provide a home for the dependent, and pay over half the costs of maintaining a home for your dependent. You cannot claim childcare or adult daycare expenses for someone who does not live with you.generally, the child must also be your dependent & If the child is not your dependent just because you allow the non-custodial parent to claim the child as a dependent, then you may be able to claim the child care credit even though you aren't claiming the child as your dependent. Only the custodial parent can take the child care credit, however.

Amount of Child & Dependent care credit:

1. The credit can be up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.
2. For 2010, you may use up to $3,000 of expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

Remember, the child & the dependent care credit are "CREDITS" so they are a dollar for dollar deduction from the amount of TAX. So you can expect a bigger refund with these credits.

• For the year 2012, the annual deductible amounts for Medical Savings Accounts (MSAs) have been increased  from the tax year 2011 amounts; as below:

 Some additional information on phaseouts is that the amount of $2,500, which is the maximum deduction for interest paid on student loans starts to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, this is an increase of $5,000 from the phase out limits for tax year 2011.

• For tax year 2012, the maximum earned income tax credit (EITC)(remember this is a credit which is directly deducted from your amount of tax, so its a big deal) for low- and moderate- income workers and working families rises to $5,891, up which was $5,751 in 2011. The maximum income limit also rises for the EITC rises to $50,270, up from $49,078 in 2011. Always keep an eye on the qualifying criteria of this credit before making its use.The credit differs by characteristics like family size, filing status and other factors, with the maximum credit going to joint filers who have three or more qualifying children.
• There is also a change in modified adjusted gross income threshold related to lifetime learning credit. The new amount of phasing out for lifetime learning credit is $104,000 for joint filers, up from $102,000, and $52,000 for singles and heads of household, up from $51,000.

• The foreign earned income deduction rises to $95,100, which is an increase of $2,200 from the maximum deduction for tax year 2011

For filing the tax returns, this year in 2010, the taxpayers will have until Tuesday, April 17 to file their 2011 tax returns and pay any tax due.
The reason for this extension is because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, which according to federal law, affects the tax deadlines in the same way that federal holidays do, falls this year on Monday, April 16. For the taxpayers who apply for an extension have until Oct. 15, 2012 to file their 2011 tax returns. This year for tax filing in 2012, the IRS will begin accepting e-file and Free File returns on Jan. 17, 2012.

So, for preparing your tax returns on time & without hassle, here are a few preparations that will help you.

For filing a Tax form, you need to consider various things like:

-The filing status: Resident Alien, Non-Resident Alien or Dual-Status Alien

There can be various circumstantial outcomes when you are a resident alien, non-resident alien or dual-status alien. In most cases non-resident aliens and dual-status aliens need to use different forms. You may need to use the 1040NR or the 1040NR EZ. For more detailed information on that you may want to take a look at Publication 519. This tax publication will help you to understand the requirements needed for you to comply with the United States tax laws.

-1040 Federal Income Tax Form Due Date is April 17th, 2012

Generally, by the due date you have to file an income tax return . But what if I didn’t get it done in time, you can file for an extension using tax Form 4868. You must file this tax form by the original due date. But, a very important thing to remember is that if you owe tax, you can't extend that. You must pay on time with the extension. The extension will give you six months to send in the paperwork but, if you owe, you must pay on time or else you will incur penalties and interest on what monies you owe.

- If you need help in filing tax form 1040 or any other tax form

There is whole lot of information available on the website irs.gov, but even then if you need information & help in filing, you can always choose softwares like Turbotax which not only helps you make your tax return, but also provides you with 24*7 help for any question you have and guarantees you the best refund!! the features are endless!

So, gear up & file your tax returns or extensions by April 17, 2012 & all the best for the biggest refund!!