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Tax Changes for 2012Here are some increases in exemptions for 2012 tax returns that may benefit you.

 

 

1. Personal & Dependent Deductions.
For each exemption you can deduct $3,700 on your 2012 tax return. That an increase of $100 per exemption.

2. Standard Deduction Amounts for 2012.

  • Single or Married Filing Separately: $5,950 – increased by $150
  • Head of Household: $8,700 – increased by $200
  • Married Filing Joint: $11,900- increased by $300
  • Married Filing Separately: $5,950 – increased by $150
  • Qualifying Widow/Widower: $11,900 – increased by $300

3. Higher Education Credit Income Thresholds.
[based on the Modified Adjusted Gross Income (MAGI)
]
Under the American Recovery and Reinvestment Act (ARRA), more parents and students qualify for a tax credit, the American opportunity credit, to pay for college expenses. The American opportunity tax credit can be claimed for expenses for the first four years of post-secondary education. It was formerly called the “The Hope Scholarship Credit”.

Income phase-out levels have been raised. The full credit is available to individual taxpayers whose modified adjusted gross income is $80,000 or less and the income limit is $160,000 for married taxpayers filing a joint return.  Married couples with MAGI of up to $180,000 and single taxpayers with MAGI of up to $90,000 will be eligible for a partial credit.

4. Federal Estate Tax Exemptions.
2012 will be $5,120,000 – that’s an increase of $120,000.

Your Safe Money KitPlanning for retirement is as important and strategic as planning for your 2012 tax year benefits.  Don’t forget to download your FREE safe money kit. Then, let’s talk about retirement planning (866) 471-7233. It’s a free consultation.