The American Taxpayer Relief Act of 2012 was passed late last night, averting a fall off the "fiscal cliff" which has been not only all over the media the past few months, but also on the minds of taxpayers ranging from low-income earners to high-income earners.
“Now that many of the looming questions about what will happen to the AMT and Bush Tax Cuts have been answered,” said Mark Steber, Chief Tax Officer, “let’s look at the changes that will be affecting taxpayers both this tax season and next.”
- The 2012 changes include permanent AMT relief with an annual inflation adjustment and a two-year extension through 2013 of many common deductions such as the educator expense, tuition and fees, and sales tax deductions.
- The tax year 2013 changes include making permanent the Bush tax rates, an increased tax rate for taxpayers with an income greater than $400,000, and many other taxpayer beneficial tax policies.
- The American Opportunity Credit, the Additional Child Tax credit that allows taxpayers to claim a refund of the unused portion of the Child Tax Credit, and the Expanded EIC which allows a higher EIC amount for taxpayers with three or more children and provides a higher income threshold for married taxpayers has been extended five years through 2017.
- The 2 percent reduction in Social Security tax was allowed to expire as expected which means lower paychecks for taxpayers beginning January 1, 2013.
Jackson Hewitt offices across the nation have begun to open their doors to help you start your 2012 tax return, answer any questions that you have on the changes to the tax law, and help you plan for the changes that will take place next year. For an office nearest you, visit our office locator.