5 Tax Trends That Could Cost You in 2012
Also, the temporarily patched exemptions for the alternative minimum tax may have come to an end in 2011. For 2012 and future years, the AMT exemption amounts will revert to a lower statutory amounts ranging from $22,500 to $45,000.
"This will result in more taxpayers being subject to the AMT, and will increase the adjustments for taxpayers already subject to the AMT," the society says.
Barring the extension of a temporary reprieve, in 2012 the Social Security tax will revert to its regular rate of 12.4%, with half (6.2%) paid by employers and the other half (6.2%) paid by employees. Self-employed people pay the full 12.4% rate as part of the self-employment tax. A temporary rate reduction dropped the rate to 4.2% for employees and 10.4% for self-employed persons. House Republicans took a political hit last month when they were seen as OK with rejecting a two-month extension and talks about the long term in favor of letting the tax rate rise while holding only long-term talks.
The $2,500 maximum deduction for interest paid on student loans begins to phase out for married taxpayers filing 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 remains at 2011 levels.A $500 credit for energy-efficient home improvements (such as windows, insulation and heating systems) has expired. Also chopped: a state and local sales tax deduction; higher-education tuition and fees deductions, the deduction for student loan interest, teachers' classroom expense deductions and mortgage insurance premium deductions. Retirees can no longer make up to a $100,000 charitable contribution directly from their IRAs to avoid taking a distribution into taxable income. Small-business concerns
A key bit of uncertainty for businesses in 2012 is what happens to health care reforms set in motion by the Patient Protection and Affordable Care Act of 2010.
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