20 Tax Changes For 2012 You Need To Know

March 11, 2012 by staff 

20 Tax Changes For 2012 You Need To Know, Several important tax changes took effect in 2011 that will impact federal income tax returns filed this April. While some of the changes are straightforward, such as the standard mileage rates, others, including the tax handling of foreign financial assets, may be more complicated. Following is a list of the tax law changes for 2011 Federal tax returns.

Alternative Minimum Tax
The alternative minimum tax (AMT) exemption amount increases for tax year 2011 to the following levels:

$48,450 for singles and heads of household (up from $47,450 in 2010)
$37,225 for married filing separately (up from $36,225)
$74,450 for married filing jointly, and qualifying widows or widowers (up from $72,450)
Alternative Motor Vehicle Credit
The alternative motor vehicle credit cannot be claimed for a vehicle bought after 2010, unless it is a new fuel cell motor vehicle.

Capital Gains and Dividends
Lower rates for long-term capital gains and dividends remain in effect for 2011 and 2012. The rate on long-term capital gains and dividends remains at zero for those taxpayers in the 15% income tax bracket and below; the rate is 15% for taxpayers in the 25% bracket and above. Most taxpayers will use new Form 8949 to report capital gain and loss transactions. Schedule D, the form that has been traditionally filed to show these transactions, is now used as a summary sheet.

Child Tax Credit
The 2010 Tax Relief Act extended the credit of $1,000 per eligible child through 2012.

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