- 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 decreased – The new AMT exemption amounts are $33,750 if single, $45,000 if married filing jointly or a qualifying widow(er), and $22,500 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.
Thursday, December 27, 2012
2012 Tax Changes
It seems that much of the focus has been on the upcoming changes to the 2013 tax year, you know the fiscal cliff, it still is important to remember that IRS tweaks the tax code each year based on expiring provisions and items required to adjusted for inflation. We have outlined some of the major changes that will affect your tax return this year according to Rapid Tax Blog.
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