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Tax Reform: What Does It Mean to You in 2012?

The 2003 Tax Act contained many provisions that were phased in over the past seven years. Many of those provisions were extended into 2012 as a result of the legislation signed into law by President Obama on December 17, 2010. The following information and tax rates are changes for 2012, some of which could affect you.

2012 Personal Exemption:  $3,800
Standard Deductions:  $11,900 Joint   $5,950 Single

These temporary tax cuts granted by Congress for 2012 are important to everyone. A rise in tax rates would have cut the after-tax pay by $3,000 for the average American taxpayer. Now is the best time to begin planning for the anticipated rate increases. Each person’s situation is unique and should be addressed individually. Our team of professionals with the Great Commission Foundation (GCF) is available to advise you on how these increases and other tax, gift and estate changes will affect you. In many cases, taxes can be reduced and even zeroed out by proper planning. Plus, you can receive this counsel without obligation: it’s a complimentary service of the ministry. You can contact us and our GCF team today by calling toll free 1-800-449-5454 or email: info@gcfccc.org. When you call or email mention code NY0JWP.

GIFT AND ESTATE TAXES

Good news on several transfer tax-fronts: exemptions are unchanged and rates are down. Plus, you may make up to $5,120,000 of taxable transfers during your lifetime, or at your death, without any gift or estate tax.

In addition, the top estate/transfer tax rate in 2012 is 35%. The “annual exclusion” from the gift tax is currently $13,000 per recipient. This allows each person to give an unlimited number of $13,000 gifts each year during his or her lifetime without incurring a gift tax. There is no limit for charitable deductions.

*Will be indexed for inflation.