- In year 2013, Standard deductions are increased to $12,200 for those married filing jointly, $8,950 for those filing as head of household, and $6,100 for those filing as single.

- The top estate tax rate is 40% and the estate tax exemption is $5.25 million.

- For capital assets acquired in 2013, Section 179 deduction is up to $500,000

- Also 50% bonus depreciation is allowed for the assets that are qualified assets which are placed in service by the end of year 2013.

- In year 2013, the personal exemption amount is $3,900 which was a raise as compared to last year.

- For people who want to contribute  to their 401(k) plan for 2013, they can contribute up to $17,500

- There are following income brackets; 10%, 15%, 25%, 28%, 33%, 35% and 39.6% individual tax rates for 2013.

-  Mileage rates for business are increased to $0.565 and medical are increased to  $0.24 respectively.

-  For people 50 or older, the IRA contribution limit is increased to $5,500 or $6,500.

- The taxable wage limit for social security was increased to $113,700.

- The employee Social Security tax rate is put back to 6.2%. Also, the Social security tax rate under SECA (self-employment tax)is put back at 12.4%

The biggest advantage of Qualifying widower status is that you get to use joint return tax rates and claim the highest standard deduc­tion amount , remember you get to claim standard deduction only if you do not itemize deductions.

Following are the conditions for getting qualified for Qualifying widower status:
- You filed a married filing jointly return for the tax year in which your spouse died
- The surviving spouse doesn't remarry
- You need to have a dependent child- may be your own, adopted or stepchild, but cannot be a foster child.
- This child has lived in your home ALL year (ex­cept for cases of temporary absences, child born or died or kidnapped during the year)
- As a taxpayer you should have paid MORE than half the cost of keeping up that home for the year.

Along with other benefits, there is a very big benefit that you can claim your dependent in dependency exemptions as well if you qualify for dependency exemptions. Please make sure that before applying the above benefits, you always consult with your tax preparer or you choose a very helpful online tax preparation tool like Turbotax.

- Credit for green improvements-The second one is a credit(yes! it goes directly off from your federal TAX). Its a Credit for green improvements. Its a credit, so its deducted directly from the amount you owe towards federal tax. The tax credit is 10% — for up to a maximum of $500. The eligibility criteria  for availing this credit is to purchase and install certain products like biomass stoves using qualified fuel, qualified new water heater, furnace, boiler, heat pump, central air conditioner, insulation, windows or roofing for your home. Also, a very important thing is that you can claim the credit for the tax year in which the appliance was installed & not just purchased. You will need to file IRS Form 5695  along with your income tax to claim the credit.

This job which you are doing under your own name without any salary is called self-employement & such earned income is called self- employement income. It is very important for it to be treated appropriately in tax return for contractors because the income if not reported or not reported appropriately, you can invite yourself a tax audit which can make you lose a bunch of hundreds or grands(depending on your case).

So, for all the contractors out there, here is some informtation about when you need to report self-employed income. If you are paid $600 or more for your work for any individual client, you should receive a Form 1099-MISC(explianed below) from your customer. Remember that you have to include this income in Schedule C of your your tax return. You can claim the deductions for your business expenses against your self employed income. And if your net earnings from self-employment(contractorship job) exceed $400, you will have to pay self-employment tax (for Social Security and Medicare) & this is ascertained on Schedule SE. Now, as a contractor you are paying double the percentage of tax which you pay as an employee, but you can deduct one-half of that SE tax as an adjustment to income on Form 1040.

Following are the two types of tax forms that are used in year 2011 tax return for contractors:

Form W-9

Form W-9 is used if you have figured out that the person you are paying is an independent contractor, the first thing you have to do is is to have the contractor complete Form W-9. With this form you request for Taxpayer Identification Number and Certification. This form can be used to request the correct name and Taxpayer Identification Number, or TIN, of the worker. A TIN may be either a Social Security Number (SSN), or an Employer Identification Number (EIN). The W-9 is supposed to be kept in your files for four years for future reference in case IRS has any questions from the worker.

Form 1099-MISC

A Form 1099 is used for various reasons, but it typically is given to an independent contractor as a record of the income that he or she received from a particular business.This is known as Form 1099-MISC. Other versions of the 1099 can be used to report different types of income, such as interest, dividends, real estate sale proceeds and debt cancellation. On a general 1099 form, such as the 1099-MISC, the income earned is noted, but there will not be any deductions for federal or state income taxes, Social Security or medical deductions. The 1099 form's recipient is not an employee of the business, so the business is obligated only to tender the income to the contractor without any deductions. Always remember, this 1099 income is also reported to the Internal Revenue Service (IRS). So if you receive 1099, always report it in your tax return.

So, all you contractors out there take these points into consideration for 2011 tax return for contractors, go ahead & report your 1099 income on your tax returns to avoid any tax audits.

- Your social Security Number
-Your filing status
- Refund Amount

This online refund status tool by IRS offers another very important feature which is the "Help" tab.It helps you to guide through the required information & many other required questions & other information, some of it I have tried to list below as-

1. Helping you that where can you find your Social Security Number or IRS Individual Taxpayer Identification Number on your tax return. The answer is something like-

• In case you filed a Form 1040, the Social Security Number is shown on Page 1 in the upper right hand corner of your tax form
• If case you filed a Form 1040EZ, the Social Security Number is shown on Page 1 in the upper right hand corner of your tax form.
• If case you filed a Form 1040A, the Social Security Number is shown on Page 1 in the upper right hand corner of your tax form.

2. Helping you with the question that where can you find your filing status- The answer help goes like this:

• In case you filed a Form 1040, the Filing Status is shown on Page 1, Boxes 1 through 5 on your tax form.
• If case you filed a Form 1040EZ, the Filing Status is either Single or Married Filing a Joint Return whatever you opted.
• In case you filed a Form 1040A, the Filing Status is shown on Page 1, Boxes 1 through 5 on your tax form.

3. "Where's my refund" online tool by IRS also helps you with the question that how can you find your refund amount- The help tab helps you in the following way with the following info:

• In case you filed a Form 1040, the Refund Amount is listed on Line 74a of your tax form.
• If you filed a Form 1040EZ, the Refund Amount is listed on Line 11a of your tax form
• If you filed a Form 1040A, the Refund Amount is listed on line 43a of your tax form.

4. Also,this feature helps you with the answer to a very important question that how long should you wait to check for your refund status- The answer gives you information that in case you chose e-file method, you should wait for 72 hours to check your status & in case you sent the paper return, then you should wait for 3-4 weeks.

In this way, the "Where's my refund" online tool by IRS is extremely helpful to all types of tax filers. Whether you are a tax filer who urgently needs the refund or one who has a curiosity of where your refund is, its for everybody!!

How to be eligible for Earned Income Credit:
To be eligible for the earned income credit, your earned income and adjusted gross income has to be within certain range. The amount of the tax credit varies based on your earned income and the number of qualifying children you are supporting in your household. The following data is the criteria for eligibility as per income range:

 For the year 2012, to be eligible for EIC, both earned income and adjusted gross income (AGI) must each be less than the following amounts:

• $45,060 ($50,270 married filing jointly) with 3 or more qualifying children
• $41,952 ($47,162 married filing jointly) with 2 qualifying children;
• $36,920 ($42,130 married filing jointly) with 1 qualifying child; or
• $13,980 ($19,190 married filing jointly) with no qualifying children.

For the year 2011, both earned income and adjusted gross income (AGI) must each be less than the following amounts:

• $43,998 ($49,078 married filing jointly) with 3 or more qualifying children
• $40,964 ($46,044 married filing jointly) with 2 qualifying children;
• $36,052 ($41,132 married filing jointly) with 1 qualifying child; or
• $13,660 ($18,740 married filing jointly) with no qualifying children.

Now, let's see what is the amount of credit you can receive from Earned Income Credit:

For the year 2012, the maximum earned income credit is as following:

• $5,891 with three or more qualifying children;
• $5,236 with two qualifying children;
• $3,169 with one qualifying child; and
• $475 with no qualifying children.

For the year 2011, the maximum earned income credit for 2011 is as follows:

• $5,751 with three or more qualifying children;
• $5,112 with two qualifying children;
• $3,094 with one qualifying child; and
• $464 with no qualifying children.

So, with all the above information on Earned Income Credit 2011-12, just grab a big refund & keep in mind its a refundable credit!!

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!!

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.