IRS announces adjustments for the year 2012

[Roland Slugg]

On October 20, 2011 the Internal Revenue Service announced the inflation-related adjustments to the 2012 tax brackets, standard deduction, personal exemptions and other amounts that are modified annually due to inflation. Most such amounts increased by about 2.5% over the same corresponding amounts in effect for the year 2011. A summary of the most common changes can viewed here:

http://www.irs.ustreas.gov/newsroom/article/0,,id=248485,00.html

Near the bottom of the above site is a link to Rev Proc 2011-52 where the details of all the changes may be viewed.

The annual gift tax exemption will remain unchanged at $13,000 in 2012.

This information may be useful to preparers wishing to fine-tune the 2012 tax planning they do for themselves and their clients.

[JG EA]

Thanks for this page!

[MAJ]

Ditto --

Always nice to help each other out!!

[FEDUKE404]

Tax trivia

In the useless trivia section:

Actually, the annual gift tax amount does change (uses the same COLA/PPI "info" as used for other stuff), but the allowed dollar amount only increases when the next $1k threshold is met.

I'm not sure if that means round-off (>$13,500) or integer (>$13,999) is needed for the next increase.

But in any case, the "real" amount is (somewhere) north of $13k and creeping upward.

Yeah....the things you can learn from some IRS folks AND it is a slow Saturday. Time to watch some football.

FE

[Snaggletooth]

Medicare

Roland, wonder what the new withholding on social security checks will be for Medicare?

Last year when the govt announced no increase because "there had been no inflation", we found out [surprise!!!] there actually WAS inflation because govt had to increase the medicare withholding to keep up with increased costs.

Wonder if there will be any increase in the "net check" after Medicare gets through.

[FEDUKE404]

Medicare rate increase clarification needed

Roland, wonder what the new withholding on social security checks will be for Medicare?

Last year when the govt announced no increase because "there had been no inflation", we found out [surprise!!!] there actually WAS inflation because govt had to increase the medicare withholding to keep up with increased costs.

Wonder if there will be any increase in the "net check" after Medicare gets through.

While I do not know what will occur starting in 2012, your comment confuses me a bit.

My spouse has been paying Medicare B premiums for several years. For all of 2010 and 2011, the rate has been constant ($96.50/month). In 2008, the monthly premiums were $96.40/month.

I can't comment on 2009 as those rates increased because we "made too much money" in 2008...and had to pay the surcharge...but that is a different topic altogether.

FE