The 2012 tax year promises to be crazy. There are literally dozens of tax credits and tax deductions set to expire for 2012. Of course, Congress will change, update, expand and contract those tax rules and others before Americans actually start filing their taxes. That means that 2012 is a year of tax changes that you need to keep track of all year long.
Tax Deductions 2012
There are thousands of tax deductions available in the tax code, and the IRS changes and updates the rules and qualifications all the time. However, there are some basic tax rules and tax deductions that everyone should understand.
First, you have to decide whether you should itemize your deductions or take the standard tax deduction for 2012. The standard deduction has been increased for both single filers and married filing jointly from 2011.
Also updated, although the numbers are unchanged are the 2012 IRA contribution limits. You’ll still need to determine if your income and retirement plan situation allow you to take an IRA tax deduction or not.
Of course, you’ll still want to be sure and deduct mortgage interest and property taxes.
And, the ever popular question on everyone’s mind, “What happens if I don’t pay my taxes?”
Other tax deductions include:
- Tax deductible mileage 2012
- 2012 IRA contributions deduction
- Self-employed and business deductions
- 2012 529 Contributions are state tax deductible in some cases
2012 Tax Brackets
The federal tax brackets 2012 are, of course, updated from 2011. IRS tax brackets are updated every year to reflect inflation. They are also, occasionally updated by Congress either due to tax cuts, or as part of an economic stimulus package. Don’t look for any big changes there this year, however, thanks to the upcoming 2012 elections this fall.
2012 Tax Changes
Look for these tax credits and deductions to expire or change significantly during 2012 or at the end of the year.
- AMT Tax Patch – Every year, Congress patches the AMT tax to avoid ensnaring millions of middle-class taxpayers. They only patch it for one year at a time because the lie that they are going to let it go back to the broken form creates fake revenue in budget projections that will never exist.
- Bust Tax Cuts Expire – The Bush tax cuts are set to expire at the end of 2012. Whether there is any renewal or not doesn’t really matter for the 2012 taxes you will file in early 2013. However, if they expire, it could significantly alter your tax bill for the taxes you’ll be filing in 2014.
- Student Loan Interest Deduction is scheduled to be reduced.
- Child and dependent care credit will be less
- Earned income tax credit will adjust
Keep an eye on FinanceGourmet throughout the year for tax tricks, tips and advice that will help lower your 2012 taxes. Grab the FinanceGourmet RSS Feed to automatically stay up to date.