2012 Tax Law Highlights

Tax bracket limits have shifted higher for 2012 and A COLA of just over 3.8% for 2012 leaves federal tax brackets looking like the ones found in this post.

Personal & dependent exemptions are each worth $100 more.  In 2012, the value of each personal and dependent exemption has increased $100 to $3,800. 

Standard deductions are up across the board, increasing from $150 -$300.

  • Married filing jointly & qualifying widower $11,900 (up $300 from 2011)
  • Single filers & married filing separately $ 5,950 (up $150 from 2011)
  • Head of household $ 8,700 (up $200 from 2011)

There has been a $500 boost in the annual contributions on limit to 401(k)s and certain other qualified retirement plans.  With the $500 2012 COLA, participants in 401(k) plans, 403(b) plans, some 457 plans and the federal Government’s Thrift Savings Plan can contribute up to $17,000 to their accounts this year. The catch-up contribution limit for plan participants 50 and older remains at $5,500.

The phase-out range for Roth IRA contributions has increased.  The Adjusted Gross Income (AGI) phase-out ranges for 2012 are as follows:

  • Married filing jointly & qualifying widower $173,000-$183,000
  • Single filers & heads of household $110,000-$125,000

These phase-out ranges are up by $4,000 for married couples filing jointly and $3,000 for singles and Heads of household compared to 2011. Married individuals filing separate returns who are covered by a Retireme