Tax Planning for 2012

Although many of us don’t start thinking about next year’s taxes until after we pay this year’s, for many taxpayers — both seniors and those of us who work with seniors —it is often helpful to look ahead. This is especially true if we have income that we aren’t sure whether to take this year or defer into next year.

In late October, the IRS released 2012 inflation-adjusted tax numbers, taking into account the 3.6% inflation rate between October 1, 2010 and September 30, 2011.

In addition to the income tax changes noted below, 2012 will see the first inflation adjustment to the exclusion amount for estate, gift, and generation skipping transfer taxes, which will increase from $5,000,000 to $5,120,000.

Some of the 2012 income tax adjustments include:

Standard Deduction
Married filing joint.....................$11,900
Head of Household........................$8,700
Unmarried or Married filing Separately...$5,950

Additional Standard Deduction for Aged and/or Blind
Married (per person).....................$1,150
Unmarried................................$1,450

Personal Exemption
All taxpayers (for each dependent).......$3,800

2012 Tax Bracket Breakpoints



Information provided by Frank Vidin, CFP, CSA, financial and non-profit consultant and CSA faculty member.

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1. Rev. Proc. 2011-52 (October 20, 2011).
2. The tax bracket breakpoint is the point where the next dollar of taxable income will be taxed at a higher bracket.