Tax Law Changes

Bonus Depreciation In order to stimulate the economy Congress has enacted special bonus depreciation in the year of acquisition for certain purchases of new tangible personal property.
For qualified property acquired and placed in service in 2016, a 50% bonus first-year depreciation allowance applies under Code Sec. 168(k).

Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
55.5 cents per mile for business miles driven
23 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011.
The medical and moving rate has been reduced by 0.5 cents per mile.

The credit of $1,000 per eligible child.

The American Opportunity Tax Credit remains in effect through 2016.
A credit is available up to $2,500 per student for the first 4 years of higher education for tuition, course related books, activity fees and any equipment that must be purchased from the educational institution as a condition of enrollment. Room & Board expenses do not qualify.
The credit begins to phase out for single taxpayers who have adjusted gross income between $80,000 and $90,000 and for joint tax filers when adjusted gross income is between $160,000 and $180,000. The credit is unavailable to taxpayers whose adjusted gross income exceeds the $90,000 and $180,000 thresholds.

Lower Capital Gains and Dividend Tax Rates Extended Through 2012.
The tax rate reductions for long-term capital gains remain in effect for 2011 and 2012.
If tax bracket = 10% or 15% the Short Term CG taxed at ordinary rates
Long Term CG and Qualifing Dividends tax rate = 0%
If tax bracket = greater than 15% the Short Term CG taxed at ordinary rates
Long Term CG and Qualifing Dividends tax rate = 15%

The foreign earned-income exclusion amount under tax code Section 911(b)(2)(D)(i) will increase in 2016 to $101,300 from $100,800,

A $2,000 credit is available for qualified expenses paid for post-secondary degree programs or for a non-degree program to acquire or improve job skills.
It is not limited to the first 4 years of postsecondary education.
Qualified expenses include tuition, course related books, activity fees and any equipment that must be purchased from the educational institution as a condition of enrollment. Room & Board expenses do not qualify.
The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $107,000 for joint filers, up from $104,000, and $53,000 for singles and heads of household, up from $52,000.

The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000,
For single taxpayers, the phase out is $60,000-$75,000.

If you provide certain transportation fringe benefits, there are 2012 changes.
The limit on the value for monthly free parking will rise to $240 (up from $230), while the limit on monthly transit passes and vanpooling will drop to $125 (down from $230).
Bicycling assistance will stay at $20 per month.