Capital Gains and Losses.  Are now be reported on new Form 8849, the totals are then carried to Schedule D.  You will receive a revised Form 1099-B from your broker that now records the basis of transactions during the year.  The basis of stocks acquired and then sold in 2011 will be reported in box 3 of Form 1099-B.

Roth 2010 Conversions first installment of taxes due.  Individuals who did a Roth conversion or rollover in 2010 and elected to spread the tax payment over 2011 and 2012 will have to pay 50% of the tax owed on their 2011 income tax return.

Standard Mileage Rate 2011 increase & mid-year increase.  The standard mileage rate for business use of a car is 51 cents a mile for the first six months of 2011 (January through June) and 55.5 cents a mile for the rest of the year, up from 50 cents for 2010.  The rate for medical expense or a deductible move is 19 cents a mile from January through June and 23.5 cents a mile after that, up from 16.5 cents in 2010.  The rate for using a car to provide services to charitable organizations remains at 14 cents a mile.

AMT exemption increased.  For 2011, the alternative minimum tax exemption increases to:
$74,450 for married filing jointly and qualifying widows and widowers, up from $72,450 in 2010.
$37,225 for a married person filing separately, up from $36,225.
$48,450 for singles and heads of household, up from $47,450.

Estate Tax Reinstated and Special Rule for 2010 Estates.  If you inherited assets where the estate elected to use the 2010 estate tax repeal option, you will receive a Form 8939 from the estate executor providing the basis information for those assets.  An heir of a 2010 estate using the 2010 estate tax repeal option (and who sold the asset before receiving Form 8939) may be surprised at the amount of capital gain tax owed on the sale.

Reporting Foreign Financial Assets.  Foreign Account Tax Compliance Act (FATCA) requires foreign assets to be reported if they have a total value of more than $50,000 ($100,000 if married filing jointly).  FATCA is broader than what is defined under the Report of Foreign Bank and Financial Accounts, or FBAR.  In addition to reporting Foreign accounts on Form TDF90-22.1, FATCA must now be reported on a new Form 8938.

Foreign Earned Income Exclusion and Foreign Housing Exclusion.  Only for those who qualify.  The foreign earned income maximum exclusion for 2011 is $92,900 and the maximum foreign housing exclusion is generally $13,006. 

SE Tax Rate Reduced.  For 2011 the social security portion of SE tax is reduced from 12.4% to 10.4%.  The Medicare part of SE tax remains at 2.9%.  As a result the SE tax rate is reduced from 15.3% to 13.3%.

Self-employed Health Insurance deduction.  Eligible self-employed individuals and S corporation shareholders can still use the self-employed health insurance deduction to reduce their income taxes.  Premiums paid for health insurance covering the taxpayer, spouse and dependents generally qualify for this deduction.  In addition, premiums paid to cover an adult child under age 27 at the end of the year, also qualify, even if the child is not the taxpayer’s dependent.  However, the deduction from self-employment income for calculating self-employment tax, was available only in tax-year 2010 and no longer applies.  The insurance plan must be set up under the taxpayer’s business, and the taxpayer cannot be eligible to participate in an employer-sponsored (including union) health plan. 

Change for HSAs and MSAs.  Starting in 2011, the additional tax on distributions from a health savings account (HSA), not used for qualified medical expenses, increases from 10% to 20%.  Similarly, the additional tax on distributions from an Archer medical savings account (MSA), not used for qualified medical expenses, rises from 15% to 20%. 

Health Plans, over the counter medicines not allowed.  Starting in 2011 over the counter medications are no longer qualified medical expenses.  Only insulin and prescribed medications qualify for tax-free reimbursement.

Limited Non-Business Energy Property Credit for 2011.  This credit generally equals 10% (down from 30% the past two years) of what a homeowner spends on eligible energy-saving improvements; with a lifetime limit of $500 reduced by prior year credits.  The energy standards are increased for most property: windows, exterior doors and skylights, for example, must meet Energy Star Program requirements.  The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items.  The cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these do not.

Discontinued Schedules.  Schedule M “Making Work Pay Credit” has expired and the schedule is no longer in use.  Schedule L “Standard Deduction for Certain Filers” is no longer in use, you don’t need it to figure your 2011 standard deduction.

New Form 1098-MA “Mortgage Assistance Payments”.  Used to report mortgage assistance payments made under state Housing Finance Agencies or the Department of Housing and Urban Development.

New Form 1099-K “Merchant Card and Third Party Network Payments“.  Payments made by banks and other entities involving merchant cards and third-party payment networks; generally must be reported on Form 1099-K by the bank or third party.  This includes for example Visa, MasterCard, PayPal and Google Checkout.  So if people pay you with a credit or debit card you will probably get a 1099-K.