For tax year 2012, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation. By law, the dollar amounts for a variety of tax provisions, affecting virtually every taxpayer, must be revised each year to keep pace with inflation and recent tax legislation. The Fiscal Cliff tax deal also makes permanent a number of tax provisions unique to this year’s tax filing season. Here are some things you should know when filing taxes this year:
- Your 2012 Individual Federal Income Tax Return is due by April 15, 2013.
- For an automatic 6-month extension of time to file, submit Form 4868 to the IRS. Caution: Although Form 4868 allows you more time to file, it does not extend the time to pay your taxes. Filing or paying after the due date may result in penalties and interest.
- If you expect to owe on your tax return, see 11 Tips for Taxpayers Who Owe Money to the IRS
- If you owe because of insufficient federal tax withholding, you can determine the correct amount of withholding here. If you owe due to lack of estimated tax payments, learn about ES Payments here.
- For most taxpayers, the first-time homebuyer credit expired in 2011. Only some military and intelligence personnel can still claim the credit. For more information, click here.
- The personal and dependent exemption amounts have increased to $3,800, up $100 from 2011.
- The standard deduction has also increased for 2012. The 2012 amounts are: Single $5,950, Head-of-household $8,700, Married Filing Joint $11,900, Married Filing Separately $5,950. The IRS estimates approximately 66% of taxpayers take the standard deduction, rather than itemizing deductions.
- To claim a deduction for business use of your vehicle, use the standard mileage rate of 55.5 cents for each business mile driven.
- The alternative minimum tax (AMT) exemption is increased to $50,600 single and $78,750 married.
- The tax rate on ordinary income for taxpayers earning over $400K (or $450K married) increases from 35% to 39.6%.
- Capital gains and dividends now have a top tax rate of 20%
- The estate tax exemption remains at $5M per person, however the top rate increased to 40%.
For immediate assistance with your tax return, or another tax matter, contact us today at 1 (714) 382-6780 for a FREE and CONFIDENTIAL consultation with former IRS Personnel and CPAs.
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