As another tax season begins, the last-minute fiscal cliff compromise retroactively reinstated tax regulations that had expired in 2011. The following is a list of some important tax regulations that may impact your 2012 taxes:
Alternative Minimum Tax exemptions are now permanently indexed for inflation. Without this patch, the average family would have paid approximately $2,800 more in unanticipated taxes for 2012.
Qualified Teaching Expenses of up to $250 for elementary and secondary school teachers can again be deducted.
Mortgage Insurance Premiums will again be treated as qualified residence interest and therefore be available as an itemized deduction.
State and Local Sales Tax can be deducted on an itemized return in lieu of state and local income taxes paid. As a convenience, tables are available to calculate an average sales tax paid based on income.
Higher Education Expenses of up to $4,000 can be deducted from your income. Alternatively, the American Opportunity Tax Credit is again available which can reduce your tax by up to $2,500.
Qualified Charitable Distributions from an IRA to a qualified charity of up to $100,000 per taxpayer over age 70 ½ will be allowed for 2012 if the distribution is made by February 1, 2013.