For 2010, the standard deduction for a single individual is $5,700 and for a married couple is $11,400. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses.
- For 2010, the personal exemption is $3,650. Individuals will claim a personal deduction for themselves, their spouse, and their dependents.
- The maximum earnings subject to social security taxes is $106,800 for 2010 and 2011.
- The standard mileage rate is $.51 per business mile as of January 1, 2011, increasing to $.555 per mile as of July 1, 2011.
- The maximum annual contribution into a 401(k) plan or a 403(b) plan is $16,500 in 2010 and 2011. And if you’ll be 50 or older by December 31st, you can contribute an extra $5,500 into your 401(k) or 403(b) account that year.
- The maximum annual contribution to your IRA is $5,000 for 2011. And if you turn 50 by December 31st, you can contribute an extra $1,000 that year. You have until April 15, 2012 to make your 2011 IRA contributions.