American Taxpayer Relief Act of 2012
The American Taxpayer Relief Act recently signed into law has kept most taxpayers from paying higher taxes after 2012. Below are some of the changes that may affect you.
The Alternative Minimum Tax was made permanent and retroactive back to January 1, 2012.
Deductions and Credits made Permanent:
· Child Tax Credit
· Marriage Penalty Relief
· The Liberalized Child and Dependent Care Credit Rules
· Expanded Adoption Credit
· Enhanced Rules for Student Loan Deductions
Deductions and Credits Extended for 5 Years:
· Earned Income Credit
· American Opportunity Credit
Deductions and Credits Extended through 2013:
· State and Local General Sales Taxes
· Educator Expenses
· Qualified Principal Residence Indebtedness
· Mortgage Insurance Premiums
· Tuition and Fees
· Charitable Distributions of IRA?s
· Credit for Energy-Efficient Existing Homes
The 2% reduction in Social Security tax for employees and self-employed individuals expired at the end of 2012 and will not be extended for 2013. An employee?s Social Security portion of FICA will increase from 4.2% to 6.2%, with a corresponding increase in self-employment tax.
Please contact our office if we can further assist you with your 2012 tax preparation or future tax planning. You can contact us at 882-2795 or www.rgr-cpa.com.