INCOME CHANGES FOR 2012

      The IRS has announced many new changes for the upcoming tax season. A lot of changes have been made due to inflation and will have an impact on every taxpayer.
Changes Include:

1. Personal and dependent exemptions will increase from $100 to 3,800.

2. Standard deductions have increased in all categories including a $300 increase for married couples filing jointly.

3. There will be an increase in Tax-Bracket thresholds.

4. The maximum earned income tax credit will increase to 5,891 from 5,751.

5. An increase in the income phase out level for married couples that pay student loan interest.

    The IRS will also increase the contribution limit for certain retirement accounts. In 2012, the new limit applies to 401(K)s, 403(b)s, the government's Thrift Savings Plan and some 457 plans. There will also be changes to Roth IRAs and pension plans, such as increasing the amount contributed.

Comments

Post a Comment

Popular posts from this blog

What is Fair in the Tax System?

                 Everyone wants to be treated fairly. That is an essential quality that all people have. But what is fairness? Trying to answer that question can prove to be difficult for some. While fairness is impartial and just treatment without favoritism or discrimination, applying this principle is a challenge. Each person has their own idea of what is fair. That is certainly true when it comes to the current tax system.           The Internal Revenue Service ( IRS ) is aware of that sentiment. After a year of review following the passing of the 2022 Inflation Reduction Act funding, they are determined to make a change. These changes will focus attention on the wealthy, partnerships, and other high-income earners who in recent years have had a sharp reduction in audits. The IRS is planning to use Artificial Intelligence to detect patterns in tax avoidance and new threats. They will also make sure that audit rates do not increase for modest earners. This is just one area that i
Read more

What is the Educator Expense Deduction for 2023?

            With the start of the new school year upon us, educators will want their students to have a complete classroom available to them. That might mean having some out-of-pocket expenses that are not reimbursed. If that’s the case, any principal, counselor, aide, or teacher who works at a K-12 school for at least 900 hours in a year can claim the Educator Expense Deduction . The current limit is $300, but that can be adjusted in the future based on inflation.           The qualifying costs can be related to books, supplies, and other materials used in the classroom. Equipment, including computer equipment and software can qualify. COVID-19 protective items used in the classroom would also apply. This can be claimed even if you use the standard deduction on your tax return. As a reminder, it is always best practice, especially when claiming a deduction, to keep good records which would include receipts. Your qualified tax professional can advise you further.
Read more

Internal Revenue Service to End Surprise In-Person Visits

               On July 24, 2023, the Internal Revenue Service ( IRS ) stated that it was ending the general practice of making unannounced in-person visits to taxpayers. The IRS is working on a new strategic plan in line with the passage of the Inflation Reduction Act last year. It is believed that this change will increase safety for revenue officers and taxpayers. There were tens of thousands of these types of visits each year. The goal was to help resolve delinquent tax matters.           In place of the visits, the IRS will send appointment letters and schedule meetings to deal with the tax problems. There will still be certain situations when unannounced visits will take place. This will be related to serving a summons or subpoenas and enforcement activity like seizure of property. If you want help in resolving a pressing tax issue, visit our website at help4yourtaxproblems.com .
Read more