One way people accumulate additional tax debts is by not claiming tax deductions and exemptions. While failing to claim these tax benefits won’t leave you with a large tax burden, it definitely costs you more than you would normally owe. With many of us facing other financial pressures, why not take advantage of any extra help the IRS has to offer.
2012 Inflation Adjustments
The IRS reviews the rate of inflation each year and adjusts tax benefits and brackets accordingly. While there haven’t been any changes over the last few years due to economic turmoil, the IRS has determined that there will be some changes to take place come 2012 tax season.
Some of the changes that will take effect for the 2012 tax season are:
- A $100 increase in the personal and dependent exemption to $3,800
- A $300 raise in the standard deduction for married couples filing together to $11,900
- An increase in singles and married couples filing separately to $5,950
- A $2,200 increase in the foreign earned income credit to $95,100
- A $2,500 deduction for student loans between $125,000 and $155,000 balances