The fuse is lit and it continues to burn with a potential "explosion" in tax law changes at the end of 2012. If you wait until the end of the year to plan for these changes it may be too late. Over the course of 2012 a number of tax tips will be provided to help become aware of the possible changes.
Itemized deductions and personal exemptions are common benefits within the tax code that reduce your taxable income. Prior to 2010, there were provisions to phase-out these tax reduction benefits for those whose income surpassed certain thresholds. After 2012, unless Congress acts, your itemized deductions and personal exemptions may once again be phased-out.
The phase-outs were triggered in 2009 when your Adjusted Gross Income (AGI) exceeded the following amounts:
Filing Status: Personal Exemption Itemized Deductions Single AGI exceeds: $166,800 $166,800Head of Household 208,500 166,800Married Joint/Widow 250,200 166,800Married Filing Separate 125,100 83,400
Is there any good news? Perhaps. During 2009 much of the phase-outs had been phased out. There is always the possibility that Congress will act and change or extend the current tax law. But if Congress does nothing the phase-outs that were phased out will be back with a vengeance in 2013.