Tax Law Highlights - 2012

After the occurance of Hurricanes Katrina, Rita and Wilma, Congress acted to eliminate the 10% of AGI limitation as well as the $100 subtraction. As of today 3/7/13 Congress has not acted to extend similar tax law changes for the victims of Hurricane Sandy. Taxpayers should contact their local Congressman and ask them to vote ASAP.
The current law is as follows:
After you have figured the amount of your loss, you must figure how much of the loss you can deduct. If the loss was to property for your personal use or your family's, there are two limits on the amount you can deduct for your casualty or theft loss.
1.You must reduce each casualty or theft loss by $100 ($100 rule). 2.You must further

An eligible educator's above the line deduction for up to $250 in qualified classroom expenses has been extended from 2011 to 2012 and 2013.

The following tax forms will be accepted by the IRS in late February or into March after updating forms and completing programming and testing of its processing systems. A specific date will be announced by the IRS in the near future.
•Form 3800 General Business Credit •Form 4136 Credit for Federal Tax Paid on Fuels •Form 4562 Depreciation and Amortization (Including Information on Listed Property) •Form 5074 Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands •Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations •Form 5695 Residential Energy Credits •Form 5735 American Samoa Economic Development Credit •Form 5884 Work Opportunity Credit •Form 6478 Credit for Alcohol Used as Fuel •Form 6765 Credit for Increasing Research Activities •Form 8396 Mortgage Interest Credit •Form 8582 Passive Activity Loss Limitations •Form 8820 Orphan Drug Credit •Form 8834 Qualified Plug-in Electric and Electric Vehicle Credit •Form 8839 Qualified Adoption Expenses •Form 8844 Empowerment Zone and Renewal Community Employment Credit •Form 8845 Indian Employment Credit •Form 8859 District of Columbia First-Time Homebuyer Credit •Form 8864 Biodiesel and Renewable Diesel Fuels Credit •Form 8874 New Markets Credits •Form 8900 Qualified Railroad Track Maintenance Credit •Form 8903 Domestic Production Activities Deduction •Form 8908 Energy Efficient Home Credit •Form 8909 Energy Efficient Appliance Credit •Form 8910 Alternative Motor Vehicle Credit •Form 8911 Alternative Fuel Vehicle Refueling Property Credit •Form 8912 Credit to Holders of Tax Credit Bonds •Form 8923 Mine Rescue Team Training Credit •Form 8932 Credit for Employer Differential Wage Payments •Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit

Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing the majority of individual income tax returns on January 30th 2013.
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March

Retirees under full retirement age (ages 62 -66 ) can earn up to $14,640 without losing benefits. Your Social Security benefits would be reduced by $1 for every $2 you earned over the limit.
In the year you reach full retirement age, $1 for every $3 you earned above the $38,880 limit.
There is no limit when you reach the full retirement age.

The Maximum amount of aged based long term care premiums that can be included as deductible medical expenses (subject to the 10 / 7.5 AGI floor) is:
$360 for 40 year olds or younger
$680 for ages 41 through 50
$1,360 for ages 51 through 60
$3,640 for ages 61 through 70
$4,550 for ages over age 70

The phase-out range for taxpayers who are members of a qualified plan are:
Married Joint/Surviving Spouse - $92,000 - $112,000
Single /Head of Household - $58,000 - $68,000
Non-Participating Soouse - $173,000 - $183,000

The Section 179 deduction cannot be used to create or add to a loss.
Income from all trades or businesses in which the taxpayer is engaged is counted in determining the income limitation,
Wages received by taxpayer AND wife from activities unrelated to those created the 179 deduction are treated as income in determining the income limitation.
The maximum deduction allowed in 2012 is the lesser of $500,000 or the Section 179 Income.

The Tax Relief Act of 2010 extended the current tax rate structure through the end of 2012.
For 2012, there will be six tax rate brackets for ordinary income of: 10%, 15%, 25%, 28%, 33%, and 35%.
All taxpayers will pay 35% of any taxable income over $388,350 except MFS pays 35% over $194,175.