Increases in Tax Benefits for 2012 Due to Inflation
- Personal and Dependent Exemptions will be $3,800 up $100 for 2011
- The new standard deduction for married filling joint is $11,900 up $300 from 2011
- For single or married and filing separately it will be $5,950 up $150 for 2011
- For head of household $8,700 up $200 form 2011
- Tax brackets for each filing status increase also
Credits, deductions, and related phase outs
- For the tax year 2012, the maximum earned income tax credit (EITC) for low- and moderate- income workers and working families raises to $5,891 up from $5,791 in 2011, the maximum income limit for the EITC rises to $50,270 up from $49,078 in 2011. The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children
- The foreign earned income deduction rises to $95,100, an increase of $2,200 from maximum deduction for the tax year 2011
- The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $104,000 for joint filers, up from $102,000, and $52,000 for singles and head of household, up from $51,000
- The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from 2011. For single filers the phase out remains the same.