“Goodbye 2011, hello 2012!”, this is what a person would normally say after the clock strikes 12:01am. They also might as well know that New Year comes with changes. And for taxpayers out there, they can expect a lot of changes in the process of filing their taxes.
Changes are made for the development of certain things so that others can make use of it better. As taxpayers, the IRS plans ahead on the things they could enhance for a better transaction of service. There are two certain areas on the process of filing taxes that they plan to change in the upcoming 2012. These two areas are the:
- Personal exemptions. The exemptions for personal and dependents will increase by $100 to $3,800. For married couples who file joint returns, there is an increase of $300 in standard deductions. The maximum earned income will increase $100 to $5,891 and there will be an increase phase out for married couples who are paying interests for student loans. And;
- 401K contributions. The contribution limits for retirement accounts also changes. Those who contribute in 401Ks in the next year will see a $500 increase in the amount they can contribute. This means the current $16,500 contributions will become $17,000. These changes are also applied to accounts such as 403B, 457 plans, and Thrift Saving Plans. Pension plans will also increase in phase out for Roth IRA contributions. Married couples ineligible to make Roth IRA contributions can make contributions up to $183,000.
Aside from the two certain areas included in the tax-filing process, the forms to be use will also said to change. A new arrangement of data will be made for easier collection of information. There will also be additional information to be filled-in on other selected forms such as the 1099 form.
Change also means new knowledge and instructions to understand and learn. Having these changes made by the IRS, only means that they wanted to serve better the community. Changes are sometimes made for the better and if one can’t adapt with these changes, there is no other choice but to follow it.