The Internal Revenue Service (IRS) has announced a number of inflation adjusted tax items for 2012, including the amounts excludable from gross income for certain employer-provided transportation benefits. By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation.
Qualified Transportation Fringe Benefits
The monthly limit on the value of the qualified transportation benefits exclusion for qualified parking provided by an employer to its employees for 2012 rises to $240, up $10 from the limit in 2011. However, the temporary increase in the monthly limit on the value of the qualified transportation benefits exclusion for transportation in a commuter highway vehicle and transit pass provided by an employer to its employees expires and reverts to $125 for 2012.
Other Items of Interest
Other inflation adjusted items for 2012 that may be of interest to employers and employees include:
- The value of each personal and dependent exemption, available to most taxpayers, is $3,800, up $100 from 2011.
- The new standard deduction is $11,900 for married couples filing a joint return, up $300, $5,950 for singles and married individuals filing separately, up $150, and $8,700 for heads of household, up $200. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
- Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $70,700, up from $69,000 in 2011.
- For tax year 2012, the maximum earned income tax credit (EITC) for low- and moderate- income workers and working families rises to $5,891, up from $5,751 in 2011. The maximum income limit for the EITC rises to $50,270, up from $49,078 in 2011.The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.
- Annual deductible amounts for Medical Savings Accounts (MSAs) increased from the tax year 2011 amounts. The minimum annual deductible increases to $2,100 for self-only coverage and $4,200 for family coverage, and the maximum annual deductible increases to $3,150 for self-only coverage and $6,300 for family coverage. The maximum out-of-pocket expenses limit increases to $4,200 for self-only coverage and $7,650 for family coverage.
For More Information
Details on these and other inflation adjustments can be found in Revenue Procedure 2011-52.