Look over these important changes to the tax code before you file your 2012 taxes
Every year the IRS tweaks the tax code at least a little bit: introducing new credits and deductions, discontinuing temporary provisions of the tax code, and adjusting various numbers for inflation.
Some years, depending on what happens in Congress, there are really big changes that end up affecting everyone pretty dramatically. But for the 2012 tax year the changes were relatively small. Still, you should be aware of them before you go gallivanting off into the tax preparation sunset.
Here, without further ado, are the tax changes for the 2012 year:
- Income limits for excluding education savings bond interest increased – Your modified adjusted gross income (MAGI) must be less than $87,850 if you’re a single filer or less than $139,250 if you’re married filing jointly or a qualifying widow(er) in order to exclude education savings bond interest.
- Foreign earned income exclusion – The maximum exclusion is now $95,100.
- Standard mileage rates – The deductible costs of using your automobile for business have increased to 55.5 cents/mile and for getting medical care or moving to 23 cents/mile. The rate for charitable use has remained the same at 14 cents/mile.
- Personal exemption increased – The personal exemption is now $3,800.
- Standard deduction increased – The standard deduction is now $5,950 for single filers and $11,900 for married filing jointly.
- Alternative minimum tax (AMT) exemption amount permanently adjusted for inflation – The new AMT exemption amounts are $50,600 if single, $78,750 if married filing jointly or a qualifying widow(er), and $39,375 if married filing separately.
- Lifetime learning credit income limits decreased – Your modified adjusted gross income must be less than $52,000 if single or $104,000 if married filing jointly in order to claim the lifetime learning credit.
- Retirement savings contribution credit income limits increased – Your modified adjusted gross income (MAGI) must be less than $28,750 if single, $57,500 if married filing jointly, and $43,125 if head of household in order to claim the retirement savings contribution credit.
- Adoption credit or exclusion – The maximum amount of the adoption credit you can receive, or the maximum amount of employer-provided adoption benefits that you can exclude, has decreased to $12,650. Note that your modified adjusted gross income (MAGI) must be less than $229,710 in order to take advantage of it.
- Adoption credit no longer refundable – The adoption credit is no longer refundable starting in 2012.
- Earned Income Credit (EIC)– The income thresholds for claiming the EIC have changed slightly for 2012.
- If three or more children lived with you, single filers must earn less than $45,060 and married couples filing jointly less than $50,270.
- If two children lived with you, single filers must earn less than $41,592 and married couples filing jointly less than $47,162.
- If one child lived with you, single filers must earn less than $36,920 and married couples filing jointly less than $42,130.
- If a child did not live with you, single filers must earn less than $13,980 and married couples filing jointly less than $19,190.
- Also note that you cannot have more than $3,200 in investment income and still claim the credit.
Now you’re ready to file your 2012 taxes!
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My husband is only provider. We have 4 children. He claimed us all on his w4. Is gross income for the year is going to be about 27,000. Will we still get a refund?
Hi Melissa,
This will depend on several other factors to ensure whether a refund will be issued or not. Please use our free Tax Calculator to help determine how much your refund will be or how much you will owe to the IRS.
Hi i just started a new job and realised they have not withheld any fed or state tax. I have two children and was wondering if i will still get a return when i file?
Hi Grace,
Probably not. I would talk to your job and ask why they aren’t withholding taxes. It’s the law. Be sure to fill out a W-4 and if no one else is claiming your children, you can claim 2 or 3 on your W-4.
I work and dont make enough to get federal taken out. I have 3 children. Can I still claim them and get the EIC? Not that it matters but I live in Michigan
Hi Lola,
You can get EIC if you are single and earn less than $45,060 or if you are married couple and filing jointly with your spouse and the two of you earn less than $50,270.
Hi, I’m doing my dad’s taxes and he and my mom file separtely (neither divorced nor legally separated but haven’t lived togoether in 20 yeras). I know my mom itemizes her taxes. If I read the rules right, he has to check line 39B which means he gets ZERO standard deduction which now increases the amount tax he owes by $1500!! He’s retired and on a pension. Is there no expeption to this new rule?
Hi Tara,
Unfortunately, married filing separately taxpayers must BOTH claim the standard deduction or BOTH itemize their deductions. So if your mother itemizes, then your father must also itemize. In this case he would not get the standard deduction, and if he were not able to claim very many itemized deductions this would certainly increase his tax bill significantly. Unless your mother derives a much larger tax benefit from itemizing her taxes, the most mutually beneficial option would probably be to have them both claim the standard deduction. It would be difficult to convince your mother to do this if she has to forgo a lot of money though.
If i didn’t get to file for the adoption credit last yr and they stop refunding it this yr can i still get refunded for last yrs credit? if so what do i need to do to get that refund?
Hi Tonia,
Yes, you can still get a refund for the credit. In order to get it you will need to amend your 2011 return (or if you didn’t file one, then file a 2011 return).