Get ready to pay Uncle Sam. This year’s April tax deadline is just around the corner, so now’s the time to get your 2012 IRS forms ready. There are a number of tax changes that may affect your 2012 return. DexKnows can help you find local tax professionals to help you prepare your return and understand how the 2012 new tax laws will affect your bottom line.
So what’s in store for 2012?
Many of the planned changes are just adjustments to take into account inflation, according to the Internal Revenue Service (IRS).
For example, taxpayers can expect a small bump up in the amount you can deduct for personal exemptions and standard deductions on your 2012 tax return, according to the IRS. And by a small bump, we mean a $100 increase for each personal and dependent exemption you have in 2012.
To adjust for inflation, the IRS also increased tax bracket thresholds as in 2012.
And there are other small increases that will go into place. Working families and low- and moderate-income workers will see their maximum earned income tax credit go up from $5,751 in 2011 to $5,891.
There will be other changes, including inflationary increases to the:
- Foreign earned income deduction
- Lifetime learning credit
- Deductible amounts for medical savings accounts
And good news if you’ve got student loans, according to the IRS. The government allows you to deduct a maximum of $2,500 in student loan interest paid each year, but you can’t deduct that amount if you make more than a certain amount. This year that amount went up for married taxpayers to $125,000. You won’t be able to take a deduction at all if you earned $155,000 or more in 2012.
The limit also went up on estate tax exclusions. In 2011 the basic exclusion from estate tax was $5,000,000. In 2012 it is $5,120,000, according to the IRS. If the executor of the estate is using a method called “special use valuation” and if the property qualifies, the IRS now says that the aggregate decrease in the value of the property cannot be more than $1,040,000, which is an increase of $20,000 from 2011.
Now’s the time to start preparing your financial information to make sure you’re ready when it comes time to file this spring. Let DexKnows help you connect with a local tax expert who can help you prepare your return and give you personalized advice.