Don't forget to take ID (D.L., passport, etc.)
Along those lines, big tax changes are coming in 2011 as many rules are set to expire. A few to be aware of:
A little worrisome for me. As a state employee I haven't had a raise in about three years, our health insurance benefits have decreased and costs increased with more of that predicted. So, our paychecks are shrinking but cost of living certainly is not. We are also losing some of our flex dollar options and they are capping it at a lower annual amount so you can't really depend on tax savings there either. This is part of what is paying for healthcare reform. And, the "tax credits" there are another joke. First, we lose other tax credits so we can be credited for buying our own health insurance, then we can pay for the insurance up front, wait for the next tax filing to apply for the credit, then wait for the tax refund (if there's any left after the raised taxes). That rebate will likely never be seen. Or if it is, it may be like the housing rebate. Jenn and Fred bought theirs last year, applied for the $8,000 tax credit in April and have yet to see the cash. Red-tape seems to have held it up somewhere along the line. Why doe this not surprise me?
Prepare for tax hikes. Based on current laws, many tax rates will go up in 2011 (although that could change, depending on what the new Congress does). Still, experts say you may want to plan ahead for the higher rates by accelerating income now, and postponing deductions until 2011, depending on your situation. More info here. Pay those estimated taxes. A provision that allowed self-employed folks to fudge a little on their estimated payments during the tax year without incurring a penalty has expired. If you've been skimping on your quarterlies, square everything away by the Jan. 15 installment so that 100% of your bill is paid. Here are some other tax changes affecting the self-employed. Budget for kid-related expenses. The child and dependent care tax credit will drop in 2011—from $3,000 in day care expenses for one child, $6,000 for two (up to 35% of costs), down to $2,400 and $4,800 respectively, with a 30% cap. Also, the child tax credit is being cut from $1,000 to $500.