ITC Update: IRS Releases Updated Standard Deduction Amounts
For all of you who are already wondering how much you will get back in Taxes next year, the IRS recently released updated Standard Deduction amounts for your 2012 Tax Return.
We have all felt the penny pinching times these days, and that goes for every aspect of our lives. From gas to groceries, we are all looking for a little extra cash. Because of recent inflation increases in our standards of living, the IRS has updated the federal income tax rules.
Here are the details:
The IRS announced that the deduction for personal and dependent exemptions shall be increased from $3,700 (2011) to $3,800 (2012).
They also announced the standard deduction increases as follows:
If you are Married filing jointly, you are eligible for an increase from $11,600 (2011) to $11,900 (2012) = $300.00
If you are filing as the Head of household, you are eligible for an increase from $8,500 (2011) to $8,700 (2012) = $200.00
If you are filing as Single, you are eligible for an increase from $5,800 (2011) to $5,950 (2012) = $150.00
If you are filing as Married filing separately, you are eligible for an increase from $5,800 (2011) to $5,950 (2012) = $150.00
IMPORTANT NOTE ** - The IRS have also adjusted the applicable tax brackets. This is a great thing because now the new laws prevent you from entering into a higher tax bracket simply because your wages have increased from year to year at the same pace as inflation.
Although the IRS are required to make necessary Tax law changes every year; they must determine whether updates are needed every year and announces any necessary changes well before the start of the upcoming year (2012). With that being said, some changes can only be made by Congress. These include changes to the alternative minimum tax and changes to the maximum amount of the child tax credit.