With the ringing in of the new year, several new tax provisions took effect. While the list of new items does not compare with the number of tax provisions that expired at the end of 2011, practitioners should be aware of what has changed.
Inflation Adjustments
The applicable amounts for many tax items increased on Jan. 1, due to annual inflation adjustments. Revised tax tables are in effect, as well as an increased personal exemption amount (now $3,800) and standard deduction amounts. Various credits and other items also were adjusted. Contribution limits and other amounts for pension plans retirement accounts were also changed for 2012. The Social Security wage base for 2012 is $110,100.
The standard mileage rate for business use of an automobile remains at 55½ cents per mile for 2012; for medical and moving expenses it decreases to 23 cents per mile, down a half-cent from the second half of 2011.
Capital Gain and Loss Reporting
Taxpayers will have to report new information on Form 1040, Capital Gains and Losses, and file a new form, Sales and Other Dispositions of Capital Assets, to report gains and losses of certain capital assets. The information on Form 8949 will correspond to the new information being reported on 2011, Proceeds from Broker and Barter Exchange Transactions.
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