IRS Updates for 2012

The IRS announced December 12th that the standard mileage rate used for businesses will stay at the current level of 55.5 cents per mile for 2012.

In addition, personal and dependency exemptions on the personal return will be worth $3,800 each, and each of the standard deductions moved slightly higher as well.  Also, the maximum amount of wages subject to Social Security taxes will move up $3,300, to $110,100 per person.

Debate continues to rage on extending the payroll tax holiday currently in place.  We’ll stay tuned to the latest coming out of Washington.

2012 Individual Deduction and Exemption Amounts

To keep pace with inflation, the IRS modified dozens of tax benefits for 2012. For example, the value of each personal and dependency exemption for most taxpayers will be $3,800, an increase of $100 over 2011. In addition, the standard deduction will be $11,900 for married couples filing a joint return, $5,950 for singles and married individuals filing separately, and $8,700 for heads of household.