Tuesday, January 8, 2013

What's New on the 2012 1040

There is not much new for the 2012 federal income tax return - other than the annual indexing for inflation.
Single (and married filing separate) = $5,950
Married filing joint = $11,900
Head of household = $8,700
Dependent = the greater of earned income plus $300 or $950, not to exceed $5,950.
The additional standard deduction amounts for taxpayers age 65 and older or blind are:
Single or head of household = $1,450
Married (joint or separate) = $1,150
The 2012 Form 1040 and 1040A are the same as their 2011 counterparts. Certain lines are marked "reserved," though. Lines 23 and 34 on the 2012 Form 1040, and Lines 16 and 18 on the 1040A, are "reserved" for the deductions for educator expenses and tuition and fees, respectively. Similarly, item b of Line 5 under "Taxes You Paid" on the 2012 Schedule A is "Reserved" for the option to deduct state and local sales taxes instead of state and local income taxes.
These deductions expired  +Dec. 31 but were extended as part of last-minute compromise tax legislation after the IRS "went to press" with 2012 forms.

Thankfully the tax compromise bill also permanently extended the Alternative Minimum Tax "patch" retroactive to 2012. Even so, because Congress waited until literally the very last minute to pass the extensions, the processing of 2012 income tax returns and the issuance of tax refunds will be delayed.