Changes in 2012

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, will affect every taxpayer, must be revised each year to keep pace with inflation. A new dollar amount will effect returns in 2012, filed by most taxpayers in early 2013, include the following:

-The value of each personal and dependent exemption, available to most taxpayers, is $3,800, up $100 from 2011.
-Standard deductions for married couples filing joint returns will go up $300 from the 11,900 it is. It will also go up $150 for those who file single or married filing separately and nearly $200 for those who file head of Household. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
- The tax-bracket thresholds will increase in each filing status.

Credit, deductions and other discontinuations;
- In 2012, the maximum earned income credit for low and moderate income workers and working families will rise to 5,891 up from 5,751 in 2011. The maximum income limit for EITC rises up to 1,192. This credit will vary by the size of your family, filing status and other factors. The maximum credit will go to married couples who file jointly with three or more qualifying children.
-Foreign earned income deduction will increase by 2,200 from 2011 maximum credit deduction.
-In 2012 the annual deductible amount for Medical Savings Account will increase from the 2011 tax year.
-The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011. For single taxpayers, the phase out ranges remain at the 2011 levels.