Income Tax Changes for 2012 (2011 Tax Year)
Standard Deduction Increased
The standard deduction for those not filing Schedule A has increased. The new standard deduction amount depends on your filing status:
| 2010 Standard Deduction | |
|---|---|
| Filing Status | Amount |
| Single | 5,950 |
| Married Filing Joint | 11,900 |
| Head of Household | 8,700 |
| Married Filing Separate | 5,950 |
IRA Contribution Limit
| Amount | |
|---|---|
| Regular | 5,000 |
| Age 50+ | 6,000 |
| IRA Deduction Phase Out | |
| Single | 58,000 - 68,000 |
| Married Filing Joint | 92,000 - 112,000 |
| Spousal IRA Deduction Phase Out | 173,000 - 183,000 |
Retirement Plan Contribution Limit
For 401k & 403b
| Amount | |
|---|---|
| Regular | 17,000 |
| Age 50 Catch Up | 5,500 |
For Simple Plans
| Amount | |
|---|---|
| Regular | 11,500 |
| Age 50 Catch Up | 2,500 |
Maximum SEP Contribution: 50,000
Additional Standard Deduction (for age 65 and blind)
| Status | Amount |
|---|---|
| Married (per person) | 1,150 |
| Single and Head of Household | 1,450 |
| Personal & Dependent Exemptions | 3,800 |
The maximum amount on earnings subject to Social Security taxes has increased to $110,000 for 2011.
Mileage Rates
For business use of your vehicle, your deduction is 51 cents per mile for driving done before July, 1, 2011. You deduction is 55.5 cents per file for the mileage driven from July 1 until the end of the year.
For medical purposes and moving expenses, you mileage deduction is 19 cents per mile for miles driven before July 1, 2011. From July 1 until the end of the year, the standard mileage deduction is 23.5 cents per mile.
For all mileage for charitable purposes, your deduction is 14 cents per mile for the entire year.
Reporting Capital Gains & Losses
You must now use form 8949 to report your capital gains and losses. You totals will then get reported on Schedule D.
Alternative Minimum Tax (AMT)
Alternative minimum tax has increased to $48,450 for single individuals, $74,450 for married filing joint, and $37,225 for married filing separate.
Personal Exemption
The deductible amount for each personal exemption has increased to $3,700 for 2011 returns.
Federal Income Tax Deadline
The deadline to file your 2011 tax return is April, 17, 2012. This is due to the 15th being a Saturday and 16th being a District of Columbia holiday.
Medicare Taxes
Medicare taxes have increased for high income earners. For an individual making over $200,000, he or she is required to pay an additional 0.9% tax for any wages earned over that amount. For married couples, the extra tax will be due for wages over $250,000.
Energy Credits
Credits for energy efficient home improvements has dropped for 2011. The credit is now 10% of the item's cost with a maximum of $500 (was 30% with a maximum of $1,500). In addition, you must be careful because there are lower limits on individual items.
Education
The American Opportunity Credit has been extended until the end of 2012. This credit offers undergraduates tax credits up to $2,500 of the first $4,000 of education expenses. You may be able to receive 40% of this credit even if you have no tax liability. The credit is phased out for individuals making over $80,000 or married couples making over $160,000.