Many 2010 tax breaks still in place for 2011

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In this Friday, Jan. 6, 2012 photo, Tai Sung, a master tax advisor for H&R Block, center, consults with clients about their taxes at his office in Rockville, Md. Tax advisors recommend starting early and file electronically. Last year, the IRS received more than 145 million returns. More than 75 percent of filers were entitled to a refund, averaging $2,913. Of those returns, about 112 million were filed electronically. (AP Photo/Jacquelyn Martin)

Updated: February 25, 2012 8:10AM

There are tax breaks for college students, job hunters and victims of natural disasters. If much of it seems familiar, that’s because it is.

With all the talk about tax reform, there weren’t many changes to tax law in 2011.

“For most people the numbers are changing but the basic concepts are the same,” said Jeff Schnepper, author of “How to Pay Zero Taxes.”

Still, don’t be complacent.

As always, tax filers should be sure to take all the deductions and credits for which they’re eligible. And because of adjustments to things such as the standard deduction and personal exemption, “some of the breaks they didn’t quality for last year, they may qualify this year, especially if they didn’t get a raise,” said Barbara Weltman, contributing editor to J.K. Lasser’s “Your Income Tax 2012.”

That’s because many deductions and credits phase out at higher incomes.

The one tax break that almost every worker got, regardless of income, was the 2 percentage point reduction in Social Security payroll taxes in 2011. And there was nothing to file. “The savings were immediate,” Schnepper said, showing up as more take-home pay.

Congress passed a two-month extension of the Social Security tax reduction just days before it was to expire at the end of 2011, and said it would negotiate to keep it in place for the full year.

Things such as the Alternative Minimum Tax patch already were in place long before the end of the year, meaning it should be a smooth start to the tax filing season.

Tax rates are the same as in the 2010 tax year, ranging from a low of 10 percent to a high of 35 percent. The lower long-term capital gains rates of 0 percent and 15 percent are good through the end of 2012.

And those with higher incomes won’t see their personal exemptions and itemized deductions reduced.

Three bits of advice from Mark Steber, chief tax officer for Jackson Hewitt Tax Services, to taxpayers beginning to think about 2011 returns: “You need to be organized. You need to collect your records. You need to electronically file.”

Adds Internal Revenue Service spokesman Terry Lemons, “Give yourself some time. Don’t wait until the absolute last minute. Don’t rush and don’t panic.”

Last year, the IRS received more than 145 million returns. More than 75 percent of filers were entitled to a refund, averaging $2,913. Of those returns, about 112 million were filed electronically.