Senate has passed the American Taxpayer Relief Act of 2012, and the
bill has been sent to the House where it is currently being reviewed.
The Act's key changes follow:
- Income taxes.The Act would keep the Bush's tax rates intact for individuals with
taxable income under $400,000 ($450,000 for married taxpayers, $425,000
for heads of household). Income above these levels would be taxed at a
- AMT patch.The Act would permanently patch the alternative minimum tax (AMT).
Social Security at some point
will touch the lives of nearly all Americans. It is probably the only real
pension most people have. It is a
defined benefit plan - the longer you live, the more you get.
social security benefits be around in the future?
A research shows that there will
be enough funds to pay full benefits till 2036. Without reform, the benefits
will be reduced to 77% in 2036. The baby boomers will not likely to be affected
by social security reform.
When to take social security
1 - Charitable Contributions (Working Poor) Tax Credit
- Maximum $200/yr (single) or $400/yr (married filing jointly) .
- Your donations must be received by the agency by December 31, 2012 to be able to take the credit for 2012.
- You have to itemize deductions on your Arizona return in order to get this tax credit.
- The charity knows if they qualify for the tax credit.
2 - Public School Tax Credit
- Maximum $200/yr (single) or $400/yr (married filing jointly).
- In order to take the tax credit, your donations must be received by the school by December 31, 2012.
1. Failure to file penalty. It is usually 5% of the
unpaid taxes for each month or part of a month that a tax return is
penalty will not exceed 25% of the unpaid taxes. If a taxpayer files
his tax return more than 60 days after the due date or extended due
date, the minimum penalty is the smaller of $135 or 100% of the unpaid
2. Failure to pay penalty. It is one-half of one
percent of the unpaid
taxes for each month or part of a month after the due date that the
taxes aren't paid.
Under the HIRE Act, individuals whose total specified foreign financial
assets exceed $50,000 (single) or 100,000 (married filed jointly) must complete Form 8938 and attach it to their 2011 Form 1040.
A specified foreign financial asset is defined as:
- Any financial account maintained by a foreign financial institution, and
- Any stock or security issued by a person other than a U.S. person
- Any financial instrument or contract held for investment that has an issuer or counterparty that is other than a U.
the 142,823,105 total individual income tax returns with a filing requirement,
1,581,394 were audited. This works out to roughly 1.1%. Of the total number of individual income tax
returns audited in FY 2010, 473,999 (30%) were for returns with an earned
income tax credit (EITC) claim.
are selected audit rates for individuals not claiming the EITC:
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