Most of you have heard the news that the more than 60 million Americans who are receiving social security will get an increase of 3.6 percent in 2012. The government is also providing some inflation relief for many tax benefits in 2012. Here are some of the changes:

  • Your personal exemption is increasing $100 to $3,800.
  • The standard deduction for couples is increasing by $300 and $150 for singles.
  • The tax bracket thresholds are increasing.
  • Some of the income based phase-out ranges are increasing.
  • The maximum contribution to your 401K will go up $500 to $17,000.
  • The income phase-outs for IRA deductibility will increase as will for ROTH IRA's.
  • The AGI limit for the saver's credit will increase.
I'm thinking 2012 will be an interesting year in the income tax business......could be many more changes coming our way.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).

IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.