What's new for individuals on this year's Form 1040? ? Business ...

To the surprise of practically no one, Form 1040 for filing 2011 returns features new twists and turns for individual taxpayers.

Alert: The usual April 15 deadline is extended to April 17 because the 15th is a Sunday and the 16th is Emancipation Day in Washington, D.C. So procrastinators have a couple of extra days to wrap things up.

The new Form 1040 incorporates modifications resulting from new laws, IRS rulings and inflation adjustments. Here?s a roundup of the key updates.

Line 15, IRA distributions: If you rolled over or converted an amount to a Roth IRA in 2010 and opted to report the taxable amount over the following two years, you must report the taxable amount for 2011 on Line 15b.

Line 16, Pensions and annuities: For distributions after 2010, you may be able to partially annuitize nonretirement plan payments from annuities, endowments and life insurance contracts. Part of the payment is tax-free, while the taxable portion must be reported on Line 16b.

Line 21, Other income: The maximum tax exclusion for employer-provided adoption assistance is $13,360 per qualified child (up from $13,170 for 2010).

Line 26, Moving expenses: The flat rate deduction for moving expenses in 2011 is 19 cents per mile for the first six months of the year and 23.5 cents per mile for the last six months (up from 16.5 cents per mile for 2010).

Line 32, IRA deduction: A deduction in 2011 is available to an ?active participant? in employer plans with a modified adjusted gross income (MAGI) between $90,000 and $110,000 on a joint return (up from $89,000-$109,000 for 2010). The phaseout range remains between $56,000 and $66,000 of MAGI for single filers.

If one spouse is an active participant and the other isn?t, the phaseout range is between $169,000 and $179,000 of MAGI (up from $167,000-$177,000 for 2010).

Line 40, Itemized deductions or standard deduction: The standard deduction for 2011 is $5,800 for single filers (up from $5,700 for 2010) and $11,600 for joint filers (up from $11,400 for 2010).

The standard deduction for heads-of-households increases to $8,500 (up from $8,400 for 2010).

Line 42, Exemptions: For 2011, the amount for each personal exemption is $3,700 (up from $3,650 for 2010).

Line 45, Alternative minimum tax: The AMT exemption amounts are increased for 2011 (see chart below).

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Line 52, Residential energy credits: The overall credit has a lifetime limit of $500 (reduced by any credit claimed in 2010). Also, the limit on energy-efficient windows is $200.

Line 53, Other credits: Partners, S corporation shareholders and self-employed individuals may be entitled to credit for retaining qualified workers in 2011. The new-hire retention credit is claimed as part of the general business credit. The alternative motor vehicles credit is no longer available except for new fuel cell motor vehicles.

Line 56, Self-employment tax: Beginning in 2011, health insurance costs for a self-employed individual and family are no longer deductible in computing self-employment tax (although the costs can be deducted on page 1 of Form 1040).

The self-employment tax rate for 2011 is reduced from 15.3% to 13.3%.

Line 59b, First-time homebuyer credit repayment: The first-time homebuyer credit for a home acquired in 2009 or 2010 is recaptured if the taxpayer sold the home in 2011 or it stopped being his or her principal residence in 2011. Complete Form 8405 to report the recaptured credit. The credit for a home acquired in 2008 generally must be recaptured over 15 years. If you fall under the 15-year credit recapture rule, you need not file Form 5405 with your return.

Line 60, Other taxes: Beginning in 2011, the tax penalty on nonqualified distributions from Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs) increases from 10% to 20%.

Line 67, First-time homebuyer tax credit: To claim the credit for 2011, the taxpayer or spouse must have served in the armed forces or been a qualified employee of the intelligence community.

Line 69, Excess Social Security tax: The maximum Social Security tax withholding on the wage base of $106,800 for 2011 is $4,485.60, based on a 4.2% rate. If you had more than that withheld in 2011, the excess will be refunded to you. ?

Line 71, Credits from Form 8839: For 2011, the maximum adoption credit increases to $13,360 per qualified child (up from $13,170 in 2010).?

Tip: Be aware that other schedules and forms have changed for 2011 (see below).

Form 8949 makes its debut

What?s really different about this year?s tax return is new Form 8949, Sales and Other Dispositions of Capital Assets. The form must be completed before filing Schedule D. The computations can become complicated if you sold both covered securities and other securities.

3 big write-offs on Form 4562

Thanks to the 2010 Tax Relief Act, certain business and real estate owners can claim generous deductions on Form 4562, Depreciation and Amortization. Here are three key tax breaks for 2011.

1. The maximum Section 179 deduction is $500,000 with a phaseout threshold of $2 million. The deduction is claimed in Part I, Election To Expense Certain Property Under Section 179.

2. A real estate owner can also write off up to $250,000 of qualified real property which includes qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property.

3. A business can claim a 100% first-year bonus depreciation deduction for qualified new (not used) assets placed in service during 2011. The deduction is claimed in Part II, Special Depreciation Allowance and Other Depreciation.

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