Tax		Forms

2012 Tax Law Changes

Many of the changes to the tax code in 2012 can be traced to the sweeping tax cuts approved by Congress back in 2002. However, some changes were directly impacted by the dramatic rise in energy costs, as well as the economic downturn.

Below is a summary of the major 2012 Tax Law Changes:

Filing Date Moves Back to April 15th For the past couple of years, the tax filing deadline for individuals has been on April 16th or April 17th. Why? Because April 15th either fell on a Sunday, or all residents of Washington, D.C., were celebrating Emancipation Day on April 16th. For 2012 tax returns, the official tax filing deadline has returned to April 15, 2013. But rest assured. If you need even more time to file, you still can file Form 4868 for an automatic extension.

Mileage Rates Boosted As energy costs have fluctuated wildly over the past couple of years, the IRS has been forced to adjust mileage rates in the middle of the year to reflect those increased costs. However, for 2012, the IRS was able to issue a single set of standard mileage rates for the entire year. For miles driven for business use between January 1 and December 31, 2012, the IRS permitted a standard mileage rate of 55.5 cents per mile. This was identical to the mileage rate from the latter half of 2011. Taxpayers who used their vehicles to get medical care between January 1 and December 31, 2012 saw their deduction set at 23 cents per mile. This was a slight drop from the 23.5 cents per mile rate established in the latter half of 2011. For 2012, the charitable mileage deduction was set at 14 cents per mile, and remained unchanged from 2011. It's important to keep proper documentation to support your deductions. Ensure that you record begin and end odometer readings, the date that you made the travel, and the specific reason for claiming the mileage rate deduction. Common financial software like Quicken, QuickBooks, and Mint can help keep track of these. The IRS has already announced mileage rates for 2013. Beginning January 1, 2013, the standard mileage rate will increase to 56.5 cents per mile for business miles driven. Also, miles driven for medical or moving purposes will increase slightly to 24 cents per mile. The charitable mileage deduction will remain unchanged at 14 cents per mile.

Alternative Minimum Tax Patched... Finally! Thanks to the last minute "fiscal cliff" legislation passed on January 1, 2013, the Alternative Minimum Tax (or AMT) for 2012 has been patched. The AMT exemption amount for individuals has increased to $50,600. If married filing joining or a qualifying widow or widower, the AMT exemption rises to $78,750. If married but filing separately, that amount rises to $39,375. For more information, download Form 6251.

Standard Deductions for 2012 Tax Returns For most people who don't itemize deductions, the basic standard deduction increased slightly. In 2012, the standard deductions were: $8,700 for head of household (up from $8,500 in 2011) $11,900 for Married taxpayers filing jointly and qualifying widows or widowers (up from $11,600 in 2011) $5,950 for married taxpayers filing separately (up from $5,800 in 2011) $5,950 for single taxpayers (up from $5,800 in 2011) Taxpayers are not able to claim the standard deduction if someone else can claim you as a dependant on their tax return.

All information is believed accurate at time of transmission, and no tax advice is implied. Always consult your tax professional if you have questions.

For more legal information, please click here.