Federal Tax Law Updates in content page of articles
Here's what's new for 2012:
Alternative Minimum Tax (AMT) exemption amounts decreased to:
$50,600 for single or head of household
$78,750 for married filing jointly or qualifying widow(er)
$39,375 for married filing separately
IRA deduction expanded -- You might be able to claim a deduction if both of these apply:
You were covered by a retirement plan.
Your income was less than $68,000 or $112,000 for married filing jointly or qualifying widow(er)
Your spouse might have been covered by a retirement plan but you weren't. If so, you might be able to claim a deduction if your income was less than $188,000 .
The first-time homebuyer credit is no longer available in 2012. Plus, you must repay the first-time homebuyer credit you received in past years if you did either of these within 36 months after you bought the home:
Moved out of the home
Sold the home
Standard mileage rates are now:
55.5 cents cents a mile for business use of a vehicle
23 cents cents a mile for medical care
Earned Income Credit (EIC) maximum income changes are:
3 or more children lived with you and you earned less than $45,060 or $50,270 if married filing jointly
2 children lived with you and you earned less than $41,952 or $47,162 if married filing jointly
1 child lived with you and you earned less than $36,920 or $47,162 if married filing jointly
No children lived with you and you earned less than $13,980 or $19,190 if married filing jointly
The maximum investment income you can earn and still get the EIC increased to $3,200 .
Divorced or separated parents: Noncustodial parents can't attach part of the divorce decree anymore. You must attach Form 8332 or a similar document. The document must have all the same information as a Form 8332 that is signed by the custodial parent. This is so the noncustodial parent is allowed the dependency exemption.
Definition of a qualifying child changes:
The child must be younger than you, or permanently and totally disabled.
If the parents could claim the child but don't, anyone trying to claim the child must have a higher AGI than either parent.
If you don't claim an exemption for your child, you can't claim the child tax credit for them.
Elective salary deferrals:
Maximum amount is $17,500 if no exceptions
Maximum amount is $12,000 if you have only SIMPLE plans
Maximum amount is $20,000 if you have only 403(b) plans and you qualify for the 15-year rule
Catch-up contributions for taxpayers age 50 or over has increased to $5,500 . This applies except for Section 401(k)(11) and SIMPLE plans