The IRS has announced increases for the Standard Deduction, Personal Exemption and Foreign Earned Income Exclusion for 2012. See how these changes may apply to you.
2012 Standard Deduction Increase
The standard deduction for married couples filing jointly or surviving spouses increased from $11,600 in 2011 to $11,900 in 2012. Single taxpayers and married taxpayers filing separately increased from $5,800 in 2011 to $5,950 in 2012. Heads of the households also face an increase from $8,500 in 2011 to $8,700 in 2012.
As a reminder, the Tax Relief of 2010 states that the standard deduction for married taxpayers filing jointly is at 200% of the standard deduction for single taxpayers through 2012.
2012 Personal Exemption Increase
The personal exemption amount has increased $100 from $3,700 in 2011 to $3,800 in 2012.
Note: Under the TRA, the phaseout of the personal exemption for higher income taxpayers does not apply to taxable years in 2011 and 2012.
2012 Foreign Earned Income Exclusion Increase
In 2012, the maximum amount of the foreign housing cost exclusion increased from $13,006 in 2011 to $13,314 in 2012 and the maximum foreign earned income exclusion increase from $92,000 in 2011 to $95,000 in 2012.
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