NEW! VIRTUAL TAX PREP
Meet with our tax pro's via video chat and file your taxes from the comfort of your own home!
 
Book Appointment Now
Tax App Download - Apple
tax-app-download-google-play
Need to File an Amended Return?

Tax Provisions Extended By Fiscal Cliff Deal

No quod sanctus instructior ius, et intellegam interesset duo. Vix cu nibh gubergren dissentias. His velit veniam habemus ne. No doctus neglegentur vituperatoribus est, qui ad ipsum oratio. Ei duo dicant facilisi, qui at harum democritum consetetur.
Fiscal Cliff Averted...for now.
Fiscal Cliff Averted…for now.

Late on January 1, 2013, Congress passed HR 8 (Tax Relief Extension Act) which extended almost all of the Federal tax provisions that had expired at the end of 2011 and 2012.

Although the Tax Relief Extension Act contains many individual, business, and energy tax provisions that were extended or modified, the following are the ones that will have the most impact on taxpayers filing their 2012 Federal returns this coming filing season.

Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) provisions were permanently extended as follows:

  • The exemption amount will be indexed for inflation each year. For 2012 the exemption amounts are:
    • Single/Head of Household: $58,600
    • Married Filing Joint: $78,750
    • Married Filing Separate: $39,375
  • All personal nonrefundable credits may be used in calculating the AMT. This also means that the order these credits are taken against regular tax will remain as they currently are.

Individual and Business Provisions
The following individual and business provisions were extended and will apply to Tax Years 2012 and 2013:

  • $250 Educator Expense Deduction – Form 1040, line 23
  • Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
  • Itemized Deduction for Sales Tax – Schedule A, line 5
  • Nonbusiness Energy Property Tax Credit reported on Form 5695, Part I
  • 15 year straight line depreciation allowed for qualified leasehold restraint and retail improvements
  • Tax-free distributions from IRAs for charitable purposes
  • Contributions of capital gain real property made for conservation purposes (50% limitation applied instead of 30% limitation)

Section 179 Expense
The following Section 179 provisions were extended and will apply to tax years 2012 and 2013:

  • Maximum deduction: $500,000
  • Maximum cost before the limit is reduced: $2,000,000
  • Qualified Real Property category which includes qualified leasehold improvements, qualified restaurant property and qualified retail improvement property which has a Section 179 expense limit of $250,000.

Adoption Credit
The portions of the Adoption credit that made it a refundable credit and increased the credit amount were not extended. Thus the adoption credit reverts back to being a nonrefundable credit with any excess being allowed to be carried forward for five years. The maximum credit for 2012 will be $12,650.

Federal Provisions That Were Not Extended
The following Federal provisions were not extended and thus are not applicable for 2012 Federal returns:

  • 5 year depreciation for farming business machinery and equipment
  • DC First-time homebuyers tax credit

Availability of Form 1040 Instructions and Publication 17
Due to the lateness of the passage of this tax bill and the uncertainty surrounding the above extender provisions the IRS has not yet released the Form 1040 instructions or Publication 17. Now that it has passed, the IRS should be releasing them in the near future.

Original Article:  Petz Enterprises