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During the wee hours of January 1, 2013 the final touches were made to 2012 tax laws. While the rest of us could not realistically make plans during 2012 for laws passed in 2013, perhaps there is a clause or two that may help you when you file your taxes in the next few months. Here is what you need to know:
- Alternative Minimum Tax (AMT). The recently passed tax package includes both a patch for the AMT and a permanent fix to keep the AMT from impacting 20 million plus more taxpayers.
Impact: If you paid AMT in 2011 you will probably pay it once again. If not, you probably won’t …unless your income or deductions change significantly. - Educators Expense Deduction is back. You may once again deduct up to $250 in out-of-pocket expenses if you are a qualified teacher. This provision also applies to 2013.
Impact: Hopefully you kept track of your out-of-pocket classroom expenses. If not, start digging through your receipts. - Tuition and Fees Deduction is back. This too was extended from 2011 to 2013.
Impact: One more educational deduction option to consider in addition to the Lifetime Learning Credit, the American Opportunity Credit, Coverdell Savings, 529 plans and more. - Charitable Contributions from seniors’ qualified retirement plans. This too, expired in 2011 and has been extended through 2013.
Impact: Good luck with this one for 2012 as the change is made after the year ended. Use this as a planning tool for your 2013 donations. - Itemized Deduction Code Extensions. The optional general sales tax deduction instead of state income tax itemized deduction was extended through 2013. So too is the ability to treat qualified mortgage insurance premiums like qualified interest.
Impact: This should help maximize your itemized deductions. If you made any large purchases during 2012 that paid sales tax you may wish to collect the receipts.
Stay tuned, many more changes were made to tax laws that will impact you in 2013. The changes noted here will have the greatest impact on your 2012 tax liability.