Changes To Your 2010 taxes

You’ll find new tax laws and a new 1040 form this tax year.  We scored some free tax advice from top CPAs with a note to check with your own tax preparer of choice who will best know your own city or state’s tax laws and how they apply to you. Eboka Eka, a CPA from Washington, DC, says that single women taxpayers should watch for these two things this tax year:

Use Your Flexible Spending Accounts

After January 1, 2011, only prescription medicines and drugs can be reimbursed through Flex Spending Accounts.  The costs of over the counter drugs will no longer be reimbursed, with the exception of insulin and other necessary items.

Celebrate The Earned Income Tax Credit Changes

The amount of the earned income credit is refundable and has increased for 2010.The most you can get for 2010 is:  $3,050 if you have one qualifying child; *$5,036 if you have two qualifying children

Our Personal Income

Gail Rosen, CPA (@gailrosencpa) from New Jersey has a note about our personal income:

The new tax bill includes a one-year reduction in the social security tax for wage earners in 2011. The social security rate went down 2% for 2011, so that gives every one of us more cash in our pocketbook. For every $10,000 we earn, we’ll get an extra $200 in tax savings in 2011. Gail suggests being smart about that found money and perhaps put it back in savings or add to your retirement account.

Gail also has good news for small business owners!  If you started a business there are a number of new tax provisions that help you write off some of your expenses:

a. You can potentially write off 100% of our capital investments like machinery and office equipment. b. Start-up expenses are deductible up to $10,000; that’s double the usual $5,000 deduction starting in 2010. c. Less documentation is needed to deduct the cost of cell phones d. Health insurance for the owner is deductible for self-employment purposes in 2010 and hopefully this provision will stay for future years.

Tax Tips For Single Parents

Timothy Gagnon, JD, MBA, from Boston has these two points to add,

Parents that were divorced or separated in 2008 or later must now have Form 8332 signed for the noncustodial parent to take the dependency exemption.  The personal exemption and itemized deductions phase outs were repealed, so you get 100% of the exemption and itemized deductions to reduce your taxable income.

Our Favorite Female CPA's

Susan Hirshman, CFA, CPA, CFP, specializes in helping women achieve financial health and independence and has a truly funny blog that makes it pain-free.  Anne, D’Amico, CPA offer expertise in personal or small business taxes, she’s in the Philadelphia Area.  Kelly Berardi, CPA, JD, can help you with your personal tax return and is a tax manager from Gray, Gray & Gray, LLPWestwood of Gray, Gray & Gray, LLP Westwood of Massachusets.