Using the results of 2010, as well as your experience thus far in 2011, you can plan how to adjust your withholdings, whether or not you want to make estimated payments to the IRS and plan for several other tax issues that may affect you in the 2011 tax year.
Other incentives of note that were extended include:
Various education tax incentives were extended, including the American Opportunity Tax Credit, the exclusion of education assistance provided by an employer from income and taxes (up to $5,250), the deduction of up to $2,500 of student loan interest paid (above the line deduction) and the $2,000 maximum contribution to a Coverdell Education Savings account.
Extension of the Residential Energy Property Credit up to $500 for purchases of items such as exterior windows and doors, water heaters, furnaces and insulation.
The Mortgage insurance premium deduction
State and Local sales tax deduction
Higher education tuition deduction
Classroom expense deduction for teachers
Exclusion from income for charitable contributions of IRA proceeds
Jordan Nellé, CPA
Davis & Hodgdon Associates CPAs