IRS Releases Some Annual Inflation Adjustments, Many Unchanged for 2011


The IRS released on Thursday its annual revenue procedure making inflation adjustments for various credits and other tax items (Revenue Procedure 2010-40). However, unlike in past years, the guidance does not include updated tax rate tables or updated amounts for the child tax credit, Hope scholarship and lifetime learning credits, earned income credit, standard deduction, overall limit on itemized deductions, qualified transportation fringe benefits, the personal exemption, or interest on education loans. The IRS says it will address those inflation adjustments in future guidance.

 

The IRS also released the 2011 pension plan limitations on Thursday (IR-2010-108).

 

Because inflation has been minimal, many of the inflation-adjusted numbers are unchanged from 2010 or have only been adjusted slightly.

 

Thursday’s revenue procedure includes updated amounts for the kiddie tax; the adoption credit; the low-income housing credit; the annual gift tax exclusion ($13,000 for 2011); and 25 other items. The adjusted amounts are generally effective for tax years beginning in 2011.

 

The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b) or 457(b) plans and the federal government’s Thrift Savings Plan remains unchanged at $16,500. The catch-up contribution limit under those plans for those age 50 and over remains unchanged at $5,500.

 

More from the JofA:

 

 Find us on Facebook      Follow us on Twitter

 

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.