Look over these important changes to the tax code before you file your 2012 taxes
Every year the IRS tweaks the tax code at least a little bit: introducing new credits and deductions, discontinuing temporary provisions of the tax code, and adjusting various numbers for inflation.
Some years, depending on what happens in Congress, there are really big changes that end up affecting everyone pretty dramatically. But for the 2012 tax year the changes were relatively small. Still, you should be aware of them before you go gallivanting off into the tax preparation sunset.
Here, without further ado, are the tax changes for the 2012 year:
- Income limits for excluding education savings bond interest increased – Your modified adjusted gross income (MAGI) must be less than $87,850 if you’re a single filer or less than $139,250 if you’re married filing jointly or a qualifying widow(er) in order to exclude education savings bond interest.
- Foreign earned income exclusion – The maximum exclusion is now $95,100.
- Standard mileage rates – The deductible costs of using your automobile for business have increased to 55.5 cents/mile and for getting medical care or moving to 23 cents/mile. The rate for charitable use has remained the same at 14 cents/mile.
- Personal exemption increased – The personal exemption is now $3,800.
- Standard deduction increased - The standard deduction is now $5,950 for single filers and $11,900 for married filing jointly.
- Alternative minimum tax (AMT) exemption amount permanently adjusted for inflation - The new AMT exemption amounts are $50,600 if single, $78,750 if married filing jointly or a qualifying widow(er), and $39,375 if married filing separately.
- Lifetime learning credit income limits decreased – Your modified adjusted gross income must be less than $52,000 if single or $104,000 if married filing jointly in order to claim the lifetime learning credit.
- Retirement savings contribution credit income limits increased – Your modified adjusted gross income (MAGI) must be less than $28,750 if single, $57,500 if married filing jointly, and $43,125 if head of household in order to claim the retirement savings contribution credit.
- Adoption credit or exclusion – The maximum amount of the adoption credit you can receive, or the maximum amount of employer-provided adoption benefits that you can exclude, has decreased to $12,650. Note that your modified adjusted gross income (MAGI) must be less than $229,710 in order to take advantage of it.
- Adoption credit no longer refundable – The adoption credit is no longer refundable starting in 2012.
- Earned Income Credit (EIC)- The income thresholds for claiming the EIC have changed slightly for 2012.
- If three or more children lived with you, single filers must earn less than $45,060 and married couples filing jointly less than $50,270.
- If two children lived with you, single filers must earn less than $41,592 and married couples filing jointly less than $47,162.
- If one child lived with you, single filers must earn less than $36,920 and married couples filing jointly less than $42,130.
- If a child did not live with you, single filers must earn less than $13,980 and married couples filing jointly less than $19,190.
- Also note that you cannot have more than $3,200 in investment income and still claim the credit.
Now you’re ready to file your 2012 taxes!
Tags: IRSThis entry was posted on Friday, December 21st, 2012 at 5:50 pm and is filed under Tax News.
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