Each year, the dollar amounts for a variety of tax provisions are adjusted to keep pace with inflation. The adjustments affecting 2012 tax returns, filed in 2013, include the following:
- The personal and dependent exemption increased $100, from $3,700 to $3,800.
- The standard deduction for married couples filing a joint return increased to $11,900, up $300; the deduction for singles and married individuals filing separately increased to $5,950, up $150; and the deduction for heads of household increased to $8,700, up $200.
- The elective deferral limit for employees who participate in section 401(k), 403(b) or 457(b) plans increased $500 to $17,000 annually. The catch-up contribution limit under those plans for those aged 50 and over remains at $5,500. In addition, the income phase-out for those who contribute to a Roth IRA increased. The phase-out range for married couples filing jointly is $173,000–$183,000, up from $169,000–$179,000. The phase-out range for singles and heads of household is $110,000–$125,000, up from $107,000–$122,000.
- For 2012, the maximum earned income tax credit (EITC) for low- and moderate-income workers rose from $5,751 to $5,891. The maximum income limit for the EITC rose from $49,078 to $50,270. The amount of the credit varies depending on family size and filing status.
- The modified adjusted gross income threshold for the lifetime learning credit increased, and now begins to phase out at $104,000 for joint filers, up $2,000 from 2011, and $52,000 for singles and heads of household, up $1,000 from 2011.
- The $2,500 maximum deduction for student loan interest paid begins to phase out at $125,000 for married taxpayers filing a joint return and phases out entirely at $155,000, which is an increase of $5,000 from 2011. The phase-out for single taxpayers remains the same (from $60,000–$75,000).
- The estate tax exclusion amount increased from $5,000,000 in 2011 to $5,120,000 in 2012, while the annual gift tax exclusion remains at $13,000.
- The Social Security Administration announced that the Social Security wage base increased from $106,800 to $110,000.
- The limit on the value of the qualified transportation benefits exclusion for qualified parking provided by an employer to its employees rose by $10 to $240 per month.