IRS Update: Things to Know for the Current Tax Year

Recently Passed American Taxpayer Relief Act Details

We have added detailed information on the American Taxpayer Relief Act of 2012 that was signed into law on January 2, 2013 to the CrossLink Tax Resource Center.

The information is broken down into the following categories:

• Individual and business provisions that were extended for 2012 and 2013 — This section explains which of the provisions that expired at the end of 2011 were extended and continue to apply to Tax Year 2012 such as:
• Educator expense deduction
• Sales tax itemized deduction
• Click here to read more
• Extended and new provisions that begin in 2013 — This section explains which of the provisions that were set to expire at the end of 2012 were extended permanently, for five years, or one year. It also includes an explanation of the new provisions such as:
• New Tax Rate for high income taxpayers
• New 20% capital gains rate for high income taxpayers
• Click here to read more
• Changes to the Adoption Credit that began in 2012

Click here to read more about which provisions were extended for Tax Year 2012 and what the coming changes are for 2013 on the Things To Know for the Current Tax Year page in the CrossLink Tax Resource Center.

IRS Update: Tax Relief Extension Act

Expired 2012 Federal Tax Provisions Extended by the Tax Relief Extension Act

Late on January 1, 2013, Congress passed HR 8 (Tax Relief Extension Act) which extended almost all of the Federal tax provisions that had expired at the end of 2011 and 2012.

Although the Tax Relief Extension Act contains many individual, business, and energy tax provisions that were extended or modified, the following are the ones that will have the most impact on taxpayers filing their 2012 Federal returns this coming filing season.

Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) provisions were permanently extended as follows:

• The exemption amount will be indexed for inflation each year. For 2012 the exemption amounts are:
• Single/Head of Household: $50,600
• Married Filing Joint: $78,750
• Married Filing Separate: $39,375
• All personal nonrefundable credits may be used in calculating the AMT. This also means that the order these credits are taken against regular tax will remain as they currently are.

Individual and Business Provisions
The following individual and business provisions were extended and will apply to Tax Years 2012 and 2013:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
• Read more

Section 179 Expense
The following Section 179 provisions were extended and will apply to tax years 2012 and 2013:

• Maximum deduction: $500,000
• Maximum cost before the limit is reduced: $2,000,000
• Read more

Click here to read the entire CrossLink Tax Update that includes further information on the Tax Relief Extension Act and Federal tax provisions that were and were not extended.