New Tax Laws for 2012

It can be a tough game keeping up with taxes. Every year many tax laws and new inheritance tax laws are signed into existence and many are also signed out of existence. Taxes are like an evolving, ever changing monster, and keeping up with all these changes can get pretty tiresome.

One of the biggest reasons they change so much is because so many people look for loopholes to get out of paying taxes, so the laws have to become more and more complicated to cover the loopholes people are constantly exploiting. However, for the rest of us who pay our taxes responsibly, it means more work come tax season. Whether it's new car tax laws or federal gift tax laws, there's always a long list of changes. Here are a few of the new tax laws you can expect next year and the coming years:

• Firstly, there's the popular First Time Homebuyer Tax Credit, which the Obama Administration has chosen to expand. The income limits for qualification have been widened as well, making it so even more people are eligible for the credit!
• Another of the new tax law changes is the Payroll Tax Credit, where workers gain 6.2 percent credit of their income. It stops at $400 for single filers and $800 for married filers. Employees don't receive it as a rebate check, but instead as credit in advance through lower income tax withholding in each paycheck.
• Standard Deductions will be $11,400 for married couples filing jointly, like it was in 2009. It's $5,700 for single filers filing standard tax deductions, which is up by $250 over last year, and it's $8,400 for heads of households, which is up $50 from last year. Also if you lived in a presidential declared disaster area, non itemizers can add causality losses.
• Usually the amount of personal exemptions and itemized deductions you can take are phased out as your income level rises. For 2010, another new tax law repeals those limits on income levels, and that repeal is extended for two years by a recent tax relief act.
• Business can now expense up to $500,000 for equipment placed in service, and the annual investment limit was raised to $2,000,000! This New Tax Law for 2010 and 2011 will make it so you wont lose the ability to expense unitl you place more than $2,000,000 of assets in service. For 2012, it drops to $120,000.
• The Hope Credit will be replaced by a new credit: the American Opportunity Tax Credit, which provides $2,500 per year for four years of college, books included. For single filers, it begins to phase out at an income of about $80,000, and for joint filers it's at $160,000. 40% of it is refundable if the credit is more than your income tax liability.
• If you're age 70 1/2 or older, you can donate $100,000 of your IRAs to charity throughout 2012 and you can deduct the donation as a charitable contribution. The Adjusted Gross Income cap on charitable contributions will not limit your deductions.
• If your Adjusted Gross Income is $89,000 or less (married filing jointly) or $56,000 (head of household or single) and if you're covered by a retirement plan at work you can take a full IRA deduction in 2010. If your Adjusted Gross Income reaches $109,000, you can take a partial IRA deductions.

There are many more new tax laws being signed into existence this coming year, like the new child tax law and the new insulation tax law. If you go to TurboTax Online, you can find out about all of them. TurboTax Deluxe also searches a database of over 300 deductions that you may qualify for, including all the new ones!