2012 Income Tax by the Numbers

Recently, the IRS released the updated figures as they apply to 2012 income tax rates and schedules, via Revenue Procedure 2011-52.  Below is a summary of the key information from this procedure document.

Adoption Assistance

The credit for adoption expenses was changed by the Patient Protection and Affordable Care Act of 2010 (and others) such that this credit was increased to $13,170, and the credit became refundable.  This provision will expire at the end of calendar year 2011, which will cause the credit to fall back to an amount of $10,000. This amount is then adjusted for inflation, such that the limit for 2012 is $12,650, and remains non-refundable. The limit for adopting a special needs child is the same at $12,650 for 2012. We’ll see if any changes come through to make any changes to the refundability.

The modified AGI limits for the phase-out of adoption credit assistance is between $189,710 and $229,710.

Tax Tables

For 2012, the tax rate tables are below:

Married Filing Jointly

If Taxable Income is:	The Tax is:
Not over $17,400	10% of the taxable income
Over $17,400 but not over $70,700	$1,740 plus 15% of the excess over $17,400
Over $70,700 but not over $142,700	$9,735 plus 25% of the excess over $70,700
Over $142,700 but not over $217,450	$27,735 plus 28% of the excess over $142,700
Over $217,450 but not over $388,350	$48,665 plus 33% of the excess over $217,450
Over $388,350	$105,062 plus 35% of the excess over $388,350

Head of Household

If Taxable Income is:	The Tax is:
Not over $12,400	10% of the taxable income
Over $12,400 but not over $47,350	$1,240 plus 15% of the excess over $12,400
Over $47,350 but not over $122,300	$6,482.50 plus 25% of the excess over $47,350
Over $122,300 but not over $198,050	$25,220 plus 28% of the excess over $122,300
Over $198,050 but not over $388,350	$46,430 plus 33% of the excess over $198,050
Over $388,350	$109,229 plus 35% of the excess over $388,350

Filing Single

If Taxable Income is:	The Tax is:
Not over $8,700	10% of the taxable income
Over $8,700 but not over $35,350	$870 plus 15% of the excess over $8,700
Over $35,350 but not over $85,650	$4,867.50 plus 25% of the excess over $35,350
Over $85,650 but not over $178,650	$17,442.50 plus 28% of the excess over $85,650
Over $178,650 but not over $388,350	$43,482.50 plus 33% of the excess over $178,650
Over $388,350	$112,683.50 plus 35% of the excess over $388,350

Married Filing Separately

If Taxable Income is:	The Tax is:
Not over $8,700	10% of the taxable income
Over $8,700 but not over $35,350	$870 plus 15% of the excess over $8,700
Over $35,350 but not over $71,350	$4,867.50 plus 25% of the excess over $35,350
Over $71,350 but not over $108,725	$13,867.50 plus 28% of the excess over $71,350
Over $108,725 but not over $194,175	$24,332.50 plus 33% of the excess over $108,725
Over $194,175	$52,531 plus 35% of the excess over $194,175

Estates and Trusts

If Taxable Income is:	The Tax is:
Not over $2,400	15% of the taxable income
Over $2,400 but not over $5,600	$360 plus 25% of the excess over $2,400
Over $5,600 but not over $8,500	$1,160 plus 28% of the excess over $5,600
Over $8,500 but not over $11,650	$1,972 plus 33% of the excess over $8,500
Over $11,650	$3,011.50 plus 35% of the excess over $11,650

Child Tax Credit and Education Credits

For 2012, the Child Tax Credit is $1,000.  The maximum amount of Additional Child Tax Credit that is refundable (via Form 8812) is $3,000.

The American Opportunity Credit (formerly the Hope Credit) remains the same for 2012 at a maximum credit of $2,500 with the calculations remaining the same – 100% of the first $2,000 of qualified tuition and expenses, and 25% of the expenses above $2,000 up to $4,000 in total. The modified AGI phase-out ranges are exactly the same as in 2011.

The Lifetime Learning Credit is maximum amount is also unchanged in 2012, at $2,000, calculated as 20% of the allowable expenses up to $10,000. The modified AGI limit for phase-out of this credit is increased to between $52,000 and $62,000 for Single filers. The phase-out limit range for married filing jointly filers is increased to between $102,000 and $124,000.

Earned Income Credit

For 2012, the following amounts apply for Earned Income Tax Credit. The earned income amount is the amount of earned income at or above which the maximum amount of the earned income credit is allowed. The threshold phaseout amount is the amount of AGI (or if greater, earned income) above which the maximum amount of the credit begins to phase out. The completed phase-out amount is the amount of AGI (or if greater, earned income) at or above which no credit is allowed.

	Number of Qualifying Children
Item	1	2	3+	None
Earned Income Amount	$9,320	$13,090	$13,090	$6,210
Maximum Amount of Credit	$3,169	$5,236	$5,891	$475
Threshold Phase-out (Single, HoH)	$17,090	$17,090	$17,090	$7,770
Completed Phase-out (Single, HoH)	$36,920	$41,952	$45,060	$13,980
Threshold Phase-out (MFJ)	$22,300	$22,300	$22,300	$12,980
Completed Phase-out (MFJ)	$42,130	$47,162	$50,270	$19,190

The investment income limit has increased for 2012 to $3,200, up from $3,100 in 2011.

Standard Deduction

As is the case pretty much every year, the Standard Deduction has also increased. The table below details the amounts for 2012:

Filing Status	Standard Deduction
Married Filing Jointly	$11,900
Head of Household	$8,700
Single	$5,950
Married Filing Separately	$5,950

For dependents of others, the Standard Deduction is the greater of $950 or $300 plus the amount of earned income of the taxpayer.

The additional Standard Deduction for folks over age 65 or blind is $1,150 if married and filing jointly, or $1,400 for singles or heads of household.

Personal Exemption

The amount of the personal exemption is increased to $3,800 in 2012 from the 2011 amount of $3,650.

Long-Term Care Premium Deductions

The amount of deductible long-term care premiums for 2012 is as follows:

Age by end of year	Premium deductible
40 or less	$350
More than 40 but not more than 50	$660
More than 50 but not more than 60	$1,310
More than 60 but not more than 70	$3,500
More than 70	$4,370

Estate and Gift Taxes

For 2012, the applicable Unified Credit for estate and gift tax exclusion is increased from $5,000,000 to $5,120,000.

The annual gift tax exclusion remains at $13,000 for 2012.

Arrow Shaft Tax

In case you’re wondering, the tax on the first sale by the manufacturer, producer, or importer of any shaft of any type used in the manufacture of certain arrows is $.046 per shaft. (More at § 4161(b)(2)(A) if you need the details on this one.)